Posted on: 16/01/2018
The cost of generating power from onshore wind has fallen by around a quarter since 2010, with solar photovoltaic (PV) electricity costs also falling by 73 per cent in that time, according to analysis.
The report from the International Renewable Energy Agency (IRENA) also highlights that solar PV costs are expected to halve by 2020.
It said the best onshore wind and solar PV projects could be delivering electricity for an equivalent of three US cents per kilowatt hour (kWh), or less within the next two years.
Global weighted average costs over the last 12 months for onshore wind and solar PV now stand at 6 cents and 10 cents per kWh respectively, with recent auction results suggesting future projects will significantly undercut these averages.
The report highlights that onshore wind is now routinely commissioned for 4 cents per kWh. The current cost spectrum for fossil fuel power generation ranges from 5-17 cents per kWh.
“This new dynamic signals a significant shift in the energy paradigm,” said Adnan Z. Amin, IRENA Director-General. “These cost declines across technologies are unprecendented 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 cited as new drivers of recent cost reductions, in addition to continued technology advancements.
“Turning to renewables for new power generation is not simply an environmentally conscious decision, it is now – overwhelmingly – a smart economic one,” said 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.”