Falling costs for renewable energy
Renewables are the cheapest alternative for communities not yet electified. Photo: DFID - UK Department for International Developmen/flickr.com/CC BY-NC-ND
A report from the International Renewable Energy Agency (IRENA) highlights the plummeting costs for renewable energy – making renewable energy more competitive then ever.
According to the IRENA report, “Renewable Power Generation Costs in 2014”, the cost of generating power from renewable energy sources has reached parity or dropped below the cost of fossil fuels for many technologies.
Biomass, hydropower, geothermal and onshore wind are all competitive with, or cheaper than, coal, oil and gas-fired power stations – cheaper even without financial support and despite falling oil prices. Solar photovoltaic (PV) is the most competitive, with solar PV module costs falling 75 per cent since 2009 and the cost of electricity from utility-scale solar PV dropping by 50 per cent since 2010. Residential solar PV systems are now 70% cheaper than they were in 2008.
In Europe and other countries, onshore wind power is one of the most competitive sources of new electricity capacity available. Individual wind projects are consistently delivering electricity for US$ 0.05 per kilowatt-hour (kWh) without financial support, compared to a range of US$ 0.045 to 0.14/kWh for fossil-fuel power plants.
When damage to human health from fossil fuels in power generation is considered in economic terms, along with the cost of CO2 emissions, the price of fossil fuel-fired power generation rises to between US$ 0.07 and 0.19/kWh.
For 1.3 billion people worldwide who do not have electricity, renewables are the cheapest source of energy and they are also advantageous in cost and security for islands and other isolated areas mainly reliant on diesel.
In 2013, a record-high 120 gigawatts of renewable energy was added to the global energy mix and similar forecast exists for 2014. Similarly, renewable energy accounted for 22 per cent of global electricity generation and 19 per cent of total final energy consumption in 2013.
The continuously falling price of renewables and the clear business case for renewables present a historic opportunity to build a clean, sustainable energy system that contributes to human health and combats climate change.