Solar and on-shore wind power costs plummet
The report also highlights that solar PV costs are expected to halve by 2020, driven by new technologies. 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, in the next two years.
Onshore wind and solar PV power generation is currently at USD 6 cents and USD 10 cents per kWh respectively, with recent auction results suggesting future projects will significantly undercut these averages. Onshore wind is now routinely commissioned for 4 cents per kWh, compared to fossil fuel power generation at 5-17 cents per kWh.
“This new dynamic signals a significant shift in the energy paradigm,” said Adnan Amin, director-general of Irena. “These cost declines across technologies are unprecendented and representative of the degree to which renewable energy is disrupting the global energy system.”
The report shows that other forms of renewable power generation such as bioenergy, geothermal and hydropower projects in the last 12 months have competed head-to-head with power from fossil fuels. By 2019 the best onshore wind and solar PV projects will be delivering electricity for a USD 3 cents per kWh, significantly below the current cost of power from fossil fuels.
This has come from more competitive procurement together with the emergence of a large base of experienced medium-to-large project developers as well as 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 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.”
Offshore wind and concentrating solar power projects commissioned for 2020-22 will cost in the range of 6 to 10 cents per kWh, and IRENA projects that all renewable energy technologies will compete with fossils on price by 2020. New bioenergy and geothermal projects commissioned in 2017 had global weighted average costs of around 7 cents/kWh.
The report was launched during the eighth IRENA Assembly this week with more than 1,100 representatives of governments from 150 countries.
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