They said that Solar and Wind are now cheaper than fossil fuels. One of the primary reasons is subsidies and new technologies. Does anyone know the comparison research using No Subsidies. If we compare the cost of solar/wind renewables vs fossil fuels, both Without subsidies, what is cheaper?



  • It says right there in the first article "Replacing hundreds of existing coal plants with unsubsidised renewable energy sources could save $32.3bn (£22.8bn) every year in energy system costs" - emphasis mine.
    – Erik
    Jun 24, 2021 at 8:58

1 Answer 1


If we compare the cost of solar/wind renewables vs fossil fuels, both Without subsidies, what is cheaper?

You have to understand the different roles of different power sources.

Coal is old-fashioned and dying. Traditional coal power plants have poor thermal efficiency, and alternatives such as integrated gasification combined cycle are expensive. Coal has the highest per-energy-unit emissions of all fossil fuels and the lowest efficiency of all fossil fuel plants. Furthermore, coal power plants have poor adjustment properties so they are best used as base load, as they can't follow the load in the electricity grid quickly enough.

Oil is so valuable that it's best reserved for transportation uses.

This leaves natural gas. Natural gas combined cycle units regularly exceed 50% efficiency in comparison to bit over 30% for coal. The trouble with natural gas is that the fuel cost is high, but if the negative externality damage caused by carbon dioxide emissions is included it isn't such bad anymore since natural gas has bit over half of the per-energy-unit emissions of coal (and less than half if you include the better efficiency in calculations). Natural gas isn't typically used with base load but rather as peaker plants, so that the plants are used only during peak electricity times.

Wind and solar power in fact are very cheap per peak megawatt -- solar cheaper than wind. However, they are not continuous base load power sources. You can only produce electricity when the weather permits. Actually, in very many cases even though solar is cheaper per peak megawatt, wind is cheaper per average megawatt-hour.

Wind and solar power are cheaper per average megawatt-hour than natural gas combined cycle turbines. But this is true only when renewables are available -- you cannot produce wind electricity in calm weather and you cannot produce solar electricity during the night or winter (unless in an area with no true winter).

Thus, the best approach is to not to ask which is cheapest and only use the cheapest power source. When wind is available, it is cheapest. When solar is available, it is cheapest. When neither is available, natural gas is cheapest (unless the area has plentiful hydropower resources in which case hydropower will out-compete natural gas and all adjustable power is hydropower based).

So, the cheapest electricity system utilizes all of these:

  • Wind power
  • Solar power
  • Hydropower as much as it is available
  • Natural gas if not enough hydropower is available

Some day natural gas will be replaced by hydrogen produced during electrolysis using wind and solar power. Today the cost of electrolysis is high so natural gas is used. The shift from natural gas to hydrogen will in new turbines require no changes to the plant, and in old turbines might require replacing the gas turbine part (but you probably can continue to use the old steam turbine of the combined cycle unit).

  • The trouble with natural gas is that the fuel cost is high: that is changing in the U.S.: Coal prices are steady, but natural gas is coming down. A bigger concern (illustrated here) is the volatility of natural gas prices, on display in Texas this year.
    – LShaver
    Jun 24, 2021 at 16:44
  • Yes, there can be regional variations as natural gas is expensive to transport over the oceans. I mainly considered Europe. Thanks to hydraulic fracturing, US prices in fact can be quite low.
    – juhist
    Jun 25, 2021 at 7:37

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