Falling renewable power costs opens door to greater climate ambition – IRENA
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 on costs for renewable power reaffirms renewables as a low-cost solution to boost global climate action.
Released on May 29, 2019, the “Renewable Power Generation Costs in 2018” report finds that costs from all commercially available renewable power generation technologies declined in 2018. The report contributes to the international discussion on raising climate action worldwide, ahead of the global preparatory meeting for the United Nations Climate Action Summit in September to be held in Abu Dhabi, United Arab Emirates (UAE).
With prices set to fall, the cost advantage of renewables will extend further and will strengthen the business case and solidify the role of renewables as the engine of the global energy transformation.
Renewable power is the backbone of any development that aims to be sustainable. 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. To fully harness the economic opportunity of renewables, IRENA will work closely with our members and partners to facilitate on-the-ground solutions and concerted action that will result in renewable energy projects, said IRENA’s Director-General Francesco La Camera.
Cost reduction for renewable power technologies
The costs for renewable energy technologies decreased to a record low last year. The global weighted-average cost of electricity from concentrating solar power (CSP) declined by 26 percent, bioenergy by 14 percent, solar photovoltaics (PV) and onshore wind by 13 percent, hydropower by 12 percent and geothermal and offshore wind by 1 percent, respectively.
Cost reductions, particularly for solar and wind power technologies, are set to continue into the next decade, the new report finds. According to IRENA’s global database, over three-quarters of the onshore wind and four-fifths of the solar PV capacity that is due to be commissioned next year will produce power at lower prices than the cheapest new coal, oil or natural gas options. Crucially, they are set to do so without financial assistance.
Onshore wind and solar PV costs between three and four US cents per kilowatt-hour (US$0.04/kWh) are already possible in areas with good resources and enabling regulatory and institutional frameworks. For example, record-low auction prices for solar PV in Chile, Mexico, Peru, Saudi Arabia, and the UAE have seen a levelised cost of electricity as low as three US cents per kilowatt hour (US$0.03/kWh).
According to IRENA, electrification on the basis of cost-competitive renewables is the backbone of the energy transformation and a key low-cost decarbonisation solution in support of the climate goals set out in the Paris Agreement.