Report Says Renewable Energy Prices Compete With Fossil Fuels In Many Countries

The Renewable Power General Costs in 2014 report has concluded that in many countries, the costs of generating power from biomass, hydropower, geothermal and onshore wind are all competing with the cost of using fossil fuels.

The report, conducted by the International Renewable Energy Agency (IRENA), revealed that solar energy is leading the cost decline, with solar PV module costs having fallen 75 per cent since 2009.

IRENA director-general Adnan Z. Amin said the renewable energy projects are now outperforming fossil fuels, especially when its comes to issues of pollution, environmental damage and ill health.

“The game has changed; the plummeting price of renewables is creating a historic opportunity to build a clean, sustainable energy system and avert catastrophic climate change in an affordable way,” he said.

Other highlights of the report include:

• In many countries, including Europe, onshore wind power is one of the most competitive sources of new electricity capacity available. Individual wind projects are consistently delivering electricity for USD 0.05 per kilowatt-hour (kWh) without financial support, compared to a range of USD 0.045 to 0.14/kWh for fossil-fuel power plants.
• The average cost of wind energy ranges from USD 0.06/kWh in China and Asia to USD 0.09/kWh in Africa. North America also has competitive wind projects, with an average cost of USD 0.07/kWh.
• Residential solar PV systems are now as much as 70% cheaper than in 2008.
• Between 2010 and 2014 the total installed costs of utility-scale solar PV systems fell by as much as 65 per cent. The most competitive utility-scale solar PV projects are delivering electricity for USD 0.08/kWh without financial support, and lower prices are possible with low financing costs. Their cost range in China, North America and South America has fallen within the range of fossil fuel-fired electricity.
• Solar power prices are dropping rapidly in the Middle East, with a recent tender in Dubai, UAE, falling to 0.06USD/kWh.
• Renewables are competitive, even when integrating high shares of variable renewables into the electricity. 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 USS 0.07 and 0.19/kWh.
•  Renewable energy accounted for 22 per cent of global electricity generation and 19 per cent of total final energy consumption in 2013.

For 1.3 billion people worldwide without electricity, renewables are the cheapest source of energy. Renewables also offer massive gains in cost and security for islands and other isolated areas reliant on diesel.

“Now is the time for a step-change in deployment for renewables,” Mr Amin said.

While the report has said that prices for renewable energy have improved in many countries, the drop is not universal. Costs range widely according to resources and finance availability. Offshore wind and concentrated solar power (CSP) technologies are in earlier stages and deployment costs remain higher than those of fossil fuels.