Renewable Energy Costs Set To Fall Below New Fossil Fuel Energy: IRENA

Boosting the business case for Renewables in the world, costs of onshore wind and solar photovoltaic (PV) technologies will in the next year be consistently cheaper than from any fossil fuel source. In its new report, IRENA reaffirms the cut-cost trend of electricity from Renewable energy and has given fresh evidence of the speed of the decline, driven by increased production runs and technology improvements.

“Renewable power is the backbone of any development that aims to be sustainable”, said IRENA’s Director-General Francesco La Camera. “We must do everything we can to accelerate renewables if we are to meet the climate objectives of the Paris Agreement. Today’s report sends a clear signal to the international community: Renewable energy provides countries with a low-cost climate solution that allows for scaling up action.”

Costs from all commercially available renewable power generation technologies declined in 2018. The global weighted-average cost of electricity declined 26% year-on-year for concentrated solar power (CSP), followed by bioenergy (-14%), solar photovoltaic (PV) and onshore wind (both -13%), hydropower (-12%), geothermal and offshore wind (both -1%), the report finds.

Among other findings:

• Onshore wind and solar PV power are now, frequently, less expensive than any fossil-fuel option, without financial assitance.
• New solar and wind installations will increasingly undercut even the operating-only costs of exisitng coal-fired plants.
• Low and falling technology costs make renewables the competitive backbone of energy decarbonisation – a crucial climate goal.
• Cost forecasts for solar PV and onshore wind continue to be revised as new data emerges, with renewables consistently beating earlier expectations.

Along with reviewing cost trends, the report analyses cost components in detail. According to the findings, costs of $0.03 to $0.04 per kilowatt-hour (kWh) for onshore wind and solar PV are already possible in some parts of the world. For example, record-low auction prices for solar PV in Chile, Mexico, Peru, Saudi Arabia, and the United Arab Emirates have seen a levelised cost of electricity as low as three US cents per kilowatt hour (USD 0.03/kWh).

At the start of last year, IRENA forecast the global average cost of electricity could fall to less than $0.049/kWh for onshore wind and $0.055/kWh for solar PV by 2020.

“A year later, the potential value for onshore wind in 2020 has dropped a further 8% to $0.045/kWh, while that of solar PV has dropped 13% to $0.048/kWh,” said the report, based on data from IRENA’s own members, business journals, industry groups, consultancies, governments, auctions and tenders.