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1 April 2014

Comparing the cost of low-carbon technologies: what is the cheapest option?

An analysis of new wind, solar, nuclear and CCS based on current support schemes in the UK and in Germany


Two decades of technological development have led to a strong reduction in the cost to produce power from wind and solar energy. The roughly 80 percent reduction in the feed-in tariff  for solar power in Germany witnessed over the past five years demonstrates this fact. But how competitive are wind and solar power today in comparison to other low-carbon technologies?

In view of Europe’s ambition to achieve the cost-effective decarbonization of the power sector, we believe this question is highly relevant.  We have therefore asked Prognos AG to compare the current cost of different low-carbon technologies, based on current technology specifi c support schemes, and taking into full account the reliability of the power system. The comparison of costs presented here is only a snapshot of the current situation. Policy choices and technological developments will infl uence future cost trends for all technologies.

With this snapshot we hope to contribute to a factbased debate on different policy options. 

Key findings

  1. New wind and solar can provide carbon-free power at up to 50 percent lower generation costs than new nuclear and Carbon Capture and Storage.

    This is the result of a conservative comparison of current feed-in tari­s in Germany with the agreed strike price for new nuclear in the UK (Hinkley Point C) and current cost estimates for CCS, neglecting future technology cost reductions in any of the four technologies.

  2. A reliable power system based on wind, solar and gas backup is 20 percent cheaper than a system of new nuclear power plants combined with gas.

    A meaningful comparison of the costs of di­erent energy technologies should take into account the need for backup capacities and peak load plants. Such a comparison shows that while additional costs arise for backup gas capacity in a system based on wind and solar PV, these costs are small compared to the higher power generation cost of nuclear.

Bibliographical data

Matthias Deutsch, Leonard Krampe, Frank Peter, Silvan Rosser
Publication number
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Publication date

1 April 2014

This publication was produced within the framework of the project Climate Friendly Power: Which Option is the Cheapest?.


Our experts

  • Daniel Fürstenwerth

    Senior Associate (until April 2015)