New IRENA report on costs for renewable power reaffirms renewables as low-cost solution to boost global climate action

Renewable power is the cheapest source of electricity in many parts of the world already today, the latest report from the International Renewable Energy Agency (IRENA) shows. The report contributes to the international discussion on raising climate action worldwide, ahead of Abu Dhabi’s global preparatory meeting for the United Nations Climate Action Summit in September. With prices set to fall, the cost advantage of renewables will extend further, Renewable Power Generation Costs in 2018 says. This will strengthen the business case and solidify the role of renewables as the engine of the global energy transformation.

https://www.irena.org/publications/2019/May/Renewable-power-generation-costs-in-2018

Key Findings

• 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%). New bioenergy, hydropower, onshore wind and solar PV projects now commonly undercut new fossil fuel-fired power generation.
  Onshore wind and solar PV will soon offer less expensive electricity than any fossil-fuel option, without financial assitance. Within the International Renewable Energy Agency (IRENA) database, over three-quarters of the onshore wind and four-fifths of the utility-scale solar PV project capacity that is to be commissioned next year shows lower prices than the cheapest new coal-fired, oil or natural gas option.
• New solar and wind installations will increasingly undercut even the operating-only costs of coal-fired plants. The total lifetime costs of new onshore wind and solar PV projects installed in 2020 and beyond are set to cost less than the operating costs of existing coal‑fired plants, with system-wide planning keeping integration costs to a minimum.
• Low and falling technology costs make renewables the competitive backbone of energy decarbonisation – a crucial climate goal. All countries need to cut carbon-dioxide (CO₂) emissions in line with the Paris Agreement, which aims to keep the rise in global temperatures “well below 2^oC” this century. Beyond the power sector, cost decreases can unlock decarbonisation for industry, transport and buildings. IRENA’s analysis sees electricity use growing from less than one-fifth of energy demand to nearly half by 2050, largely on the back of cost-competitive renewables.
• In many parts of the world, renewables are already the lowest-cost source of new power generation. As solar and wind costs keep falling, this will become the case in even more countries. Global weighted-average costs of electricity from bioenergy, hydropower, geothermal, onshore and offshore wind have been within the cost range of fossil fuel-fired power generation since 2010. Utility-scale solar photovoltaic (PV) power fell into the fossil-fuel cost range in 2014 and concentrating solar power (CSP) in 2018.
• Cost forecasts for solar PV and onshore wind continue to be revised as new data emerges, with renewables consistently beating earlier expectations. At the beginning of 2018, IRENA’s analysis of auction and PPA data suggested that the global weighted-average cost of electricity could fall to just under five US cents per kilowatt-hour (USD 0.049/kWh) for onshore wind and five and a half cents per kilowatt-hour (USD 0.055/kWh) for solar PV in 2020. A year later, the potential value for onshore wind in 2020 has dropped a further 8%, to four and a half cents per kilowatt-hour (USD 0.045/kWh), while that of solar PV drops 13%, to less than five cents for kilowatt-hour (USD 0.048 /kWh).

Source: irena.org