The cost of generating power from onshore wind has fallen by around a quarter since 2010, with solar photovoltaic (PV) electricity costs falling by 73 per cent in that time, according to new cost analysis from the International Renewable Energy Agency (IRENA). The report also highlights that solar PV costs are expected to halve by 2020. The best onshore wind and solar PV projects could be delivering electricity for an equivalent of USD 3 cents per kilowatt hour (kWh), or less within the next two years.
Global weighted average costs over the last 12 months for onshore wind and solar PV now stand at USD 6 cents and USD 10 cents per kWh respectively, with recent auction results suggesting future projects will significantly undercut these averages. The report highlights that onshore wind is now routinely commissioned for USD 4 cents per kWh. The current cost spectrum for fossil fuel power generation ranges from USD 5-17 cents per kWh.
The report also shows that the cost of generating power from renewable energy sources continues to fall significantly, to the extent that that all renewable technologies will become competitive by 2020 compared to fossil fuels to meet new power generation needs.
The energy sector is responsible for about 25% of global greenhouse gas emissions. Improving energy efficiency and increasing the share of renewable power in the global energy mix is critical to reducing carbon dioxide emissions and achieving the central goal of the Paris Climate Change Agreement, which is to limit the global average temperature rise to well below two degrees and as close as possible to 1.5 degrees Celsius above pre-industrial levels.
“This new dynamic signals a significant shift in the energy paradigm,” said Adnan Z. Amin, IRENA Director-General. “These cost declines across technologies are unprecedented and representative of the degree to which renewable energy is disrupting the global energy system.”
The report projects that by 2019, the onshore wind and solar energy projects could deliver electricity for an equivalent of USD 3 cents per kilowatt hour (kWh) or less, significantly below the current cost of power from fossil fuels.
Released on the first day of IRENA’s Eighth Assembly in Abu Dhabi, ‘Renewable Power Generation Costs in 2017’ highlights that other forms of renewable power generation, such as bioenergy, geothermal and hydropower projects in the last 12 months have competed head-to-head on costs, with power from fossil fuels.
The report says the cost of generating power from onshore wind has fallen by around a quarter since 2010, with solar energy costs falling by 73% in that time. The report also suggests that solar power costs are expected to halve by 2020.
Global weighted average costs over the last 12 months for onshore wind and solar energy now stand at USD 6 cents and USD 10 cents per kWh respectively, with recent auction results suggesting future projects will significantly undercut these averages. The report notes that onshore wind is now routinely commissioned for USD 4 cents per kWh. The current cost spectrum for fossil fuel power generation ranges from USD 5-17 cents per kWh.
Competitive procurement practices together with the emergence of a large base of experienced medium-to-large project developers competing for global market opportunities, are cited as new drivers of recent cost reductions, in addition to continued technology advancements.
“Turning to renewables for new power generation is not simply an environmentally conscious decision, it is now – overwhelmingly – a smart economic one,” said Mr. Amin. “Governments around the world are recognizing this potential and forging ahead with low-carbon economic agendas underpinned by renewables-based energy systems. We expect the transition to gather further momentum, supporting jobs, growth, improved health, national resilience and climate mitigation around the world in 2018 and beyond.”
The report was launched during the eighth IRENA Assembly, which welcomes more than 1,100 representatives of governments from 150 countries. As the world’s principal platform for international cooperation on renewable energy, the Assembly provides strategic guidance to the work of the Agency for the next four years and positions it to play a key role in driving the global energy transformation.
The relevant IRENA press release is here.
See the report’s Executive Summary and the full report.
To view the original article from the UNFCCC, please click here.
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