The plummeting price of lithium-ion batteries is opening up new opportunities for them to be used to balance a renewables-heavy generation mix.
That’s according to Bloomberg New Energy Finance (BNEF), which has published a new update for the first half of 2019 showing the levelised cost of electricity (LCOE) for the technology has fallen by 35% to $187 (£141.5) per MWh since the first half of last year.
The firm says solar or wind projects combined with battery storage are starting to be competitive with coal and gas generation for the provision of flexible, reliable power, without the use of subsidies.
In the past, meeting the ups and downs of electricity demand has largely been the preserve of technologies such as open-cycle gas turbines and gas reciprocating engines but the report stresses this is now changing.
As well as the affordability of batteries drastically improving, the LCOE for offshore wind also tumbled significantly over the period, dropping by around a quarter to below $100 (£75.7) per MWh compared to more than $220 (£166.5) just five years ago.
BNEF suggests this is due to new auction programmes for additional capacity, combined with much larger turbines being developed.
Onshore wind and photovoltaic solar have also become more affordable, with respective LCOEs reaching $50 (£37.9) and $57 (£43.1) per megawatt-hour for projects starting construction in early 2019, down 10% and 18% on a year before.
Tifenn Brandily, Energy Economics Analyst at BNEF, said: “Solar photovoltaics and onshore wind have won the race to be the cheapest sources of new ‘bulk generation’ in most countries but the encroachment of clean technologies is now going well beyond that, threatening the balancing role that gas-fired plant operators, in particular, have been hoping to play.”