Renewables can be cheaper than both existing and new coal - IRENA
Renewable energy generation in Lithuania. Source: Ministry of Energy of the Republic of Lithuania.
If the world replaces its costliest 500 GW of coal-fired power generating capacity next year with solar photovoltaic (PV) and onshore wind it would reduce annual power system costs by as much as USD 23 billion (EUR 20.5bn), a new report shows.
The International Renewable Energy Agency (IRENA) estimates that replacing that much existing coal capacity in 2021 with cheap renewables would also reduce annual carbon dioxide (CO2) emissions by about 1.8 gigatonnes and yield an investment stimulus of USD 940 billion, or the equivalent of around 1% of global GDP.
The “Renewable Power Generation Costs in 2019” report by IRENA also concludes that renewable power is becoming increasingly cheaper than any new fossil fuel-based electricity capacity as last year more than half of the new renewables projects achieved lower power costs than the most affordable new coal plants.
The cost of utility-scale solar PV power has plunged by 82% since 2010, while that of concentrating solar power (CSP) has dropped by 47%. Onshore and offshore wind power costs are down 39% and 29%, respectively. The table below shows the year-on-year decline of green electricity costs in 2019.
Global average by technology
Utility-scale solar PV
According to the agency, the prices for newly commissioned solar PV plants in 2021, based on competitive procurement, could average USD 0.039/kWh, which would be a 42% reduction from 2019. Moreover, it considers values as low as USD 0.03/kWh to be possible given record-low auction prices for solar PV in the UAE, Chile, Ethiopia, Mexico, Peru and Saudi Arabia.
IRENA has also determined that in 2019 an investment only 18% higher than the amount spent in 2010 was enough to finance the commissioning of twice as much renewable power generation capacity.