The falling costs of renewables means the “economic case for building new coal and gas capacity is crumbling”, according to Bloomberg New Energy Finance (BNEF).

Research published by BNEF indicates the price of onshore wind and solar has dropped 18% in the last year. It also points to the impact of a 79% decrease in lithium-ion battery costs; that this results in more cost-effective storage options that can compete with gas plants when it comes to ‘flexibility’ performance in the energy mix: the ability for systems to switch on and off during peaks and dips.

“Some existing coal and gas power stations, with sunk capital costs, will continue to have a role for many years,” said Elena Giannakopoulou, head of energy economics at BNEF. “But the economic case for building new coal and gas capacity is crumbling, as batteries start to encroach on the flexibility and peaking revenues enjoyed by fossil fuel plants.”

Next month’s BNEF Future of Energy Summit in New York, taking place on 9 and 10 April, will discuss the impact of these trends.