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"Renewables show that LCOE is a function of learning as much as project costs"
Even though supply chain disruptions and inflation have increased the cost of solar power, onshore wind, and battery storage, with cost rises of between 4% and 14% (from mid-2021 to mid-2022), renewables remain the cheapest source of new bulk power for countries comprising 2/3 of the world’s population .
Indeed, prices for many raw materials and freight costs have been on an increasing trend since the beginning of 2021 . However, the gap with fossil fuel generation has widened as fuel and carbon prices rise even faster. New-build solar and onshore wind projects are now 40% cheaper than BNEF’s global benchmarks for new coal and gas-fired power, which stand at USD 74/MWh and USD 81/MWh, respectively .
Countries investments in renewables are paying huge dividends in 2022. In Europe, btw Jan and May 2022, solar PV and wind generation alone have likely avoided in the order USD 50 billion in fossil fuel imports (mainly gas). However, a delay before cost increases appears in project total installed costs and improvements in performance in 2021, raising capacity factors (especially onshore wind), assured this situation .
LCOE for solar PV & onshore wind
The cost of new-build onshore wind has risen 7% year on year, and fixed-axis PV has jumped 14%. BNEF estimates for the global LCOE for utility-scale PV and onshore wind rose to USD 45/MWh and USD 46/MWh, respectively, in the first half of 2022  (and to USD 120/MWh for solar+storage, according to DNV ). The cheapest renewable power projects in the first half of 2022 were able to achieve an LCOE of USD 19/MWh, as in best-in-class onshore wind farms in Brazil, and USD 21/MWh for tracking PV farms in Chile .
LCOE for green & blue hydrogen
The current levelized cost of green hydrogen production lies in the broad range of USD 3-6/kg, making it uneconomical. The current levelized cost of blue hydrogen production typically lies in the range of USD 2.8-3.5/kg based on a gas prices ranging from USD 6-11/MMBtu .