Evaluating Energy Investment Strategy
In 2009, the cost to generate a unit of electricity from a new solar power plant was approximately $359, while the cost from a new coal plant was about $111. By 2019, the cost for new solar power had fallen to approximately $40 per unit, while the cost for new coal power was about $109 per unit. An energy investment analyst in 2019 makes the following statement: 'Despite recent trends, investing in the construction of new coal-fired power plants remains the most prudent long-term economic strategy due to its established technology and historical cost-effectiveness.' Critically evaluate the analyst's statement, using the provided cost data to support your argument regarding the most economically sound investment for new power generation in 2019.
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Source for Figure 2.23: Lazard's Levelized Cost of Energy Analysis (2019)
Cost Inversion of Renewables Led to Dominance in New Global Capacity (2019)
Analyzing Production Input Assumptions
Consider the following data on the cost of generating electricity from new power plants: In 2009, the cost per unit of electricity from solar power was the highest, followed by wind, with coal and gas being the least expensive. By 2019, this situation had reversed; the cost for solar and wind had fallen dramatically, making them the least expensive sources for new electricity generation, cheaper than new coal or gas plants. Based on this information, which of the following is the most logical economic consequence?
Evaluating Energy Investment Strategy
Energy Infrastructure Investment Decision
Energy Infrastructure Investment Decision
Consider the economic trend from 2009 to 2019, where the cost to build and operate a new solar or wind power facility dropped significantly, becoming lower than the cost to build and operate a new coal or gas power facility. Based solely on this information, it is a valid conclusion that by the end of 2019, it was more expensive to continue operating an existing, fully constructed coal plant than to replace it with a new solar facility.
In 2009, the cost of generating electricity from new power plants was highest for solar, followed by wind, with gas and coal being the least expensive. By 2019, technological advancements had dramatically lowered the cost of renewables, reversing this order. Based on this information, arrange the following energy sources from MOST expensive to LEAST expensive for building a new power plant in 2019.
Based on the major economic trends observed between 2009 and 2019, match each energy source with the description that best characterizes the change in its cost for building new electricity generation capacity.