The cost of generating power from renewable energy sources has reached parity or dropped below the cost of fossil fuels for many technologies in many parts of the world, the International Renewable Energy Agency (IRENA) has revealed in a new report.
The landmark report, Renewable Power Generation Costs in 2014, concludes that biomass, hydropower, geothermal and onshore wind are all competitive with or cheaper than coal, oil and gas-fired power stations, even without financial support and despite falling oil prices. Solar photovoltaic (PV) is leading the cost decline, with solar PV module costs falling 75 per cent since the end of 2009 and the cost of electricity from utility-scale solar PV falling 50 per cent since 2010.
"Renewable energy projects across the globe are now matching or outperforming fossil fuels, particularly when accounting for externalities like local pollution, environmental damage and ill health," said Adnan Z. Amin, Director-General of IRENA. "The game has changed; the plummeting price of renewables is creating a historic opportunity to build a clean, sustainable energy system and avert catastrophic climate change in an affordable way."
The report states that in many countries, including Europe, onshore wind power is one of the most competitive sources of new electricity capacity available. Individual wind projects are consistently delivering electricity for $0.05/kWh without financial support, compared to a range of $0.045 to 0.14/kWh for fossil fuel power plants.
It also says that between 2010 and 2014 the total installed costs of utility-scale solar PV systems fell by as much as 65 per cent. The most competitive utility-scale solar PV projects are delivering electricity for $0.08/kWh without financial support, and lower prices are possible with low financing costs. Their cost range in China, North America and South America has fallen within the range of fossil fuel-fired electricity.
The report notes that renewable energy price improvements are not universal, and that costs range widely according to resources and the availability of financing. Offshore wind and concentrated solar power (CSP) technologies are in earlier stages and deployment costs remain higher than those of fossil fuels.
Sian Crampsie
