The cost of generating power from renewable energy is falling so much that it will be competitive with fossil fuel generation by 2020, finds a new report from the International Renewable Energy Agency (IRENA).
The cost of onshore wind power has fallen by around a quarter since 2010, while the cost of solar photovoltaic (PV) electricity has fallen by 73 per cent in that time, according to a new cost analysis from IRENA.
With continued technology advancements, the renewable energy agency predicts that the best onshore wind and solar PV projects could be delivering electricity for an equivalent of 3 cents per kilowatt hour (kWh) or less within the next two years. The current cost spectrum for fossil fuel power generation ranges from 5-17 cents per kWh.
Onshore wind power is now as affordable as any other sources at 4 cents per kWh. While solar PV is higher at 10 cents per kWh, these costs are expected to halve by 2020.
“This new dynamic signals a significant shift in the energy paradigm,” said Adnan Z. Amin, director-general of IRENA. “These cost declines across technologies are unprecedented and representative of the degree to which renewable energy is disrupting the global energy system.”
Competitive procurement practices together with the emergence of a large base of experienced medium-to-large project developers competing for global market opportunities are also cited as new drivers of recent cost reductions.
“Turning to renewables for new power generation is not simply an environmentally conscious decision, it is now – overwhelmingly – a smart economic one,” continued 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.”
Image credit: David Clarke via Flickr