IRENA says renewables cheapest for off-grid

Nov 20, 2012 - The falling cost of renewable energy has made it the cheapest option to generate electricity for hundreds of millions of people who do not have grid access, the International Renewable Energy Agency (IRENA) said in a policy brief on Sunday.

In addition, according to the findings, which the agency said were a "wake-up call to policy-makers," renewable energy is now also the lowest-cost way of expanding grid supply in locations with rich resources, such as sun and wind.

"The message is clear: renewable energy today is often the cheapest option to meet rising demand for electricity – even without subsidies," IRENA innovation director Dolf Gielen said.

According to IRENA, solar photovoltaic (PV) costs usually range between USD 0.16 (EUR 0.12) and USD 0.36 per kWh and the technology is poised to reach grid parity with residential power tariffs in a number of locations worldwide. The cost of concentrating solar power has fallen to as low as USD 0.14 per kWh, while the most competitive onshore wind sites can generate electricity at USD 0.04 per kWh.

The study has also found that biomass power has become competitive in areas with cheap agricultural or forestry waste and that the most competitive projects generate electricity for as little as USD 0.06 per kWh. Hydropower, the leading renewable energy source at the moment, often offers the cheapest electricity among all generation sources, it says.

By comparison, the cost of fossil fuel electricity is in the range of USD 0.06 to USD 0.12 per kWh in the countries part of the Organisation for Economic Co-operation and Development (OECD), excluding transmission and distribution costs.

(USD 1.0 = EUR 0.781)

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