The costs of decarbonizing by ramping up solar and wind are highly dependent on context. The purpose of this data-file is to enable stress-testing of the CO2 abatement costs of renewables, in different contexts and at different grid penetrations. Our own estimate is that solar and wind can reach 40% of the global grid for a $60/ton average CO2 abatement cost of wind and solar.
Thunder Said Energy is a research firm focused on energy technologies and energy transition. In our roadmap to net zero, we have plotted hundreds of different options on a cost curve, according to their CO2 abatement cost, i.e., what is the cost in $/ton to remove each ton of CO2 from the global energy system?
The costs of wind and solar are often quoted in c/kWh terms, but what is their cost in CO2 abatement terms, i.e., in $/ton of CO2 avoided. We have written a research note (below) aiming to answer this question and this data-file contains the underlying modelling.
The CO2 abatement costs of solar and wind are highly context-dependent. For example, a utility scale solar assets that prevents having to build a new diesel genset has deeply negative CO2 abatement cots, while new offshore wind farm that displaces a fully depreciated nuclear plant has a CO2 abatement cost of infinity!
This data-file enables stress-testing of the CO2 abatement costs of solar and wind. The proper way to calculate this is on a total grid basis, dividing the total change in the cost of the grid (in c/kWh) by the total change in the CO2 intensity of the grid (in kg/kWh) and then juggling the units.
Calculating CO2 abatement costs of renewables in this way is necessary, because otherwise the numbers will not reflect the CO2 intensity of what is being displaced, falling grid utilization, rising curtailment rates and the concomitant rise in total grid costs.
In the model, you can also flex your assumed costs and grid shares for wind, solar, hydro, nuclear, gas and coal, the share of displaced generation that is assumed to be ully depreciated versus greenfield, and the rise in transmission costs associated with increasing renewables.