The economic competitiveness of renewables over fossil fuels shows no sign of slowing. What years ago might have seemed like a pipe dream is today a reality.

This is the conclusion of the latest research by Bloomberg New Energy Finance (Bnef), which examines the levelised cost of electricity (Lcoe) for the second half of 2015, drawing on thousands of data points from projects around the world. To calculate the Lcoe, financing, construction, operational and maintenance costs of a plant were all taken into account.

The data are clear: onshore wind (that is, land-based wind installations) and solar photovoltaic — today the most widely used renewable technologies (hydro aside) — have driven down electricity generation costs, while gas and coal plants have recorded an increase compared to the first half of this year.

According to Seb Henbest, Bloomberg New Energy Finance's head for Europe, the Middle East and Africa (EMEA), the report "shows how wind and solar continue to get cheaper thanks both to the ongoing fall in technology costs and to a reduction in financing charges," while the costs of gas and coal are rising due to externalities and because they are being used to a lesser extent.

The figures behind the trend

Here are some of the data reported in the Bnef report that show how renewables are beating fossil fuels in terms of average production costs. Values are expressed in dollars per megawatt-hour (MWh).

Renewable technologies:

• Onshore wind has fallen from $85 to $83 globally
• Solar photovoltaic has dropped from $129 to $122
• Offshore wind, although costs are falling more slowly than for onshore wind, has moved from $176 to $174, and remains more expensive than fossil fuels.

As regards fossil fuels, the trend indicated by the data shows that:

• Coal has risen in Europe from $82 to $105, in America from $66 to $75, and in Asia-Pacific from $68 to $73.
• Combined-cycle power plants running on natural gas have moved from $103 to $118 in the EMEA region, and similarly in other regions, reaching $83 in America and $93 in Asia-Pacific.

Nuclear, like gas and coal, has average electricity production costs that vary considerably across different geographical areas, but it too has recorded an increase. In the EMEA region the average cost is $158, while in America it reaches $261.

Looking at the individual countries examined in the Bnef report, the situation that stands out in particular is that of:

• Germany, where onshore wind costs are around $80, compared with $118 for gas and $106 for coal
• the United Kingdom, where wind comes in at $85 while gas and coal have a generation cost of $115

In China, wind ($77) is more cost-effective than gas ($113), but more expensive than coal, which has generation costs of $44, while solar photovoltaic stands at $109.

Luca Mills, an energy analyst at Bnef, explained that "generation costs continue to vary from region to region," as they are influenced by a large number of factors, including the shale gas boom in the United States, the carbon price in Europe, differing nuclear regulations across countries, and varying levels of incentives granted to solar photovoltaic.

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