Between 2022 and 2023, utility-scale solar PV projects showed the most significant decrease (by 12%). For newly commissioned onshore wind projects, the global weighted average LCOE fell by 3% year-on-year; whilst for offshore wind, the cost of electricity of new projects decreased by 7% compared to 2022.
The Capital Costs vary among the power resources. Natural Gas Combustion Turbine Generator (CTG) plants have the lowest capital cost at around $974 per Kilowatt, followed by Coal-Fired, Biomass, and Photovoltaic Solar. The most expensive Capital Cost for a power plant is Offshore Wind. (5) Variable costs are the costs of day-to-day operations.
Many different factors affect spending and profits for the power industry. When it comes to generation, costs depend on two main factors: fixed costs and variable costs. Fixed costs remain relatively stagnant, and variable costs are continually changing. Standard Fixed costs include: Typical variable costs of generation include:
Amongst the different sources of renewable electricity generation, concentrating solar power and offshore wind were the most expensive in 2023, with an average cost of 11.7 and 7.5 cents per kilowatt-hour, respectively. In contrast, onshore wind electricity generation cost an average of 3.3 cents per kilowatt-hour that year.
In that period, the cost of solar (concentrating solar power and utility-scale solar photovoltaic) and offshore wind became competitive with the cost of new capacity fired by fossil fuels, calculated without financial support.
That said, the rate at which solar panels generate electricity varies depending on the amount of direct sunlight and the quality, size, number and location of panels in use. Even in winter, solar panel technology is still effective; at one point in February 2022, solar was providing more than 20% of the UK’s electricity.1