06/06/2019 – News / Energy / Electricity / Renewables / IRENA
Falling costs bolster business case for renewable power as driver in energy transformation, finds IRENA report
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 contributes to the international discussion on raising climate action worldwide, ahead of Abu Dhabi’s global preparatory meeting for the United Nations Climate Action Summit in September.
With prices set to fall, the cost advantage of renewables will extend further, according to the new IRENA report ‘Renewable Power Generation Costs in 2018’. This will strengthen the business case and solidify the role of renewables as the engine of the global energy transformation, the Agency stated.
The “backbone” of sustainable development
“Renewable power is the backbone of any development that aims to be sustainable,” remarked IRENA’s Director-General Francesco La Camera. “We must do everything we can to accelerate renewables if we are to meet the climate objectives of the Paris Agreement.”
Mr La Camera continued that the new report sends “a clear signal” to the international community: that 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,” he added.
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 per cent, bioenergy by 14 per cent, solar photovoltaics (PV) and onshore wind by 13 per cent, hydropower by 12 per cent and geothermal and offshore wind each by one per cent.
Lower prices than the cheapest thermal options
Moreover, 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. And 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 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 just three US cents per kilowatt hour (USD 0.03/kWh).
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.
To read IRENA’s report, ‘Reneable Power Generation Costs 2018’, visit: https://www.irena.org/publications/2019/May/Renewable-power-generation-costs-in-2018
To read IRENA’s report, ‘Global Energy Transformation: A Roadmap to 2050’, visit: https://www.irena.org/publications/2019/Apr/Global-energy-transformation-A-roadmap-to-2050-2019Edition
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