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Most new onshore wind, solar PV power to be cheaper than coal in 2020

Image by: Green Energy Markets (www.greenmarkets.com.au).

May 29 (Renewables Now) - Of the plants due to be commissioned in 2020, about 77% of the onshore wind and 83% of the utility-scale solar photovoltaic (PV) capacity will generate electricity at lower prices than the cheapest fossil fuel-fired option, according to a new report.

The “Renewable Power Generation Costs in 2018” report, prepared by the International Renewable Energy Agency (IRENA), shows that costs for renewables had declined to a record low last year and are set to continue their fall into the next decade, especially for solar and wind power technologies.

According to the IRENA Auction and PPA Database, onshore wind and solar PV will consistently be cheaper than the least-cost fossil fuel alternative by 2020 and, most importantly, this will happen without financial assistance. For example, in 2020, at USD 0.048 (EUR 0.043) per kWh, the weighted average power purchase agreement (PPA) or auction price for solar PV from projects in the IRENA database is seen at less than the marginal operating costs for about 700 GW of operational coal-fired capacity. At USD 0.045/kWh, onshore wind, in turn, should be below the marginal operating costs of nearly 900 GW of coal capacity. By 2020, offshore wind and concentrating solar power (CSP) will offer electricity in the range USD 0.06-0.10 per kWh, the agency projects.

In 2018, the global weighted-average levelised cost of electricity (LCOE) of solar PV decreased by 13% year-on-year to 0.085/kWh, while that of onshore wind went down 13% to USD 0.056/kWh. The costs for all other renewable energy technologies declined as well, with CSP down 26%, bioenergy down 14%, hydropower down 12% and geothermal and offshore wind down 1%.

The table below gives more information about global electricity costs in 2018.

in USD GLOBAL WEIGHTED-AVERAGE COST OF ELECTRICITY (USD/KWH) 2018 COST OF ELECTRICITY: 5TH AND 95TH PERCENTILES (USD/KWH) 2018 CHANGE IN THE COST OF ELECTRICITY 2017–2018
Bioenergy 0.062 0.048–0.243 −14%
Geothermal 0.072 0.060–0.143 −1%
Hydro 0.047 0.030–0.136 −11%
Solar PV 0.085 0.058–0.219 −13%
Concentrating solar power (CSP) 0.185 0.109–0.272 −26%
Offshore wind 0.127 0.102–0.198 −1%
Onshore wind 0.056 0.044–0.100 −13%

Data from IRENA’s Auction and PPA Database indicates all existing available renewable power technologies will compete-head-to-head with incumbents by 2020-2022.

IRENA points out that onshore wind and solar PV projects are already capable of achieving costs of between USD 0.03 and USD 0.04 per kWh in areas with good resources and favourable regulatory and institutional frameworks.

(USD 1.0 = EUR 0.897)

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Ivan is the mergers and acquisitions expert in Renewables Now with a passion for big deals and ambitious capacity plans.

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