A new report published by the International Renewable Energy Agency has concluded that onshore wind, hydropower, geothermal, and bioenergy-for-power projects commissioned during 2017 were largely found to be on par with fossil fuel-based electricity technologies, while solar PV costs are expected to halve by 2020.
Specifically, according to the International Renewable Energy Agency (IRENA), the cost of generating power from onshore wind has fallen by 23% between 2010 and 2017, and projects are now regularly being commissioned at a levelized cost of electricity (LCOE) of USD 4 cents per kilowatt-hour (kWh), with a global weighted average of around 6 cents/kWh. But the big news is that recent auctions in Brazil, Canada, Germany, India, Mexico, and Morocco in 2017 resulted in onshore wind power projects with an LCOE as low as 3 cents/kWh.
In the same range, the global weighted average cost for hydropower was 5 cents/kWh and 7 cents/kWh for bioenergy and geothermal projects. Meanwhile, the cost of generating power from solar PV fell by 73% between 2010 and 2017 with a global weighted average LCOE for utility-scale solar of 10 cents/kWh, and are expected to halve again by 2020.
All of this compares remarkably favorably with the current cost spectrum for fossil fuel-based technology, which ranges from 5 to 17 cents per kWh.
“This new dynamic signals a significant shift in the energy paradigm,” said Adnan Z. Amin, IRENA Director-General, speaking at the launch of the report on the first day of IRENA’s Eighth Assembly being held in Abu Dhabi. “These cost declines across technologies are unprecendented and representative of the degree to which renewable energy is disrupting the global energy system.”
The new report, Renewable Power Generation Costs in 2017, highlights the latest trends for each of the major renewable energy technologies based on latest cost and auction prices from around the world. The key finding — which serves to solidify similar predictions made by industry experts and analysts — is that renewable energy technologies are becoming increasingly competitive with fossil fuel-based technologies and that cost reduction will only continue to increase, serving to emphasize the futility of the fossil fuel industry.
IRENA also predicts that in 2019, the best onshore wind and solar PV projects will be completed and deliver electricity for 3 cents per kWh, well below the current level of fossil fuel-based technologies.
“Turning to renewables for new power generation is not simply an environmentally conscious decision, it is now — overwhelmingly — a smart economic one,” explained 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.”