Key Takeaways:
- Solar, wind, hydropower & biomass costs dropped by double digit percentages last year
- Wind & solar energy costs fell to as low as $0.03/kWh in some regions
- IRENA forecasts another decade of price drops for renewables
Just when it seemed renewable energy costs couldn’t fall any further, they did. The price of solar, wind and “almost every source of green energy” dropped further over the past year, making renewables reach a tipping point of cost-competitiveness with fossil fuel-generated electricity. The question now becomes: how soon before cost matrices lead us to a 100% renewable future?
Presently, electricity generated by hydropower remains the cheapest renewable on the global market (at $0.05 per kilowatt hour). Onshore wind, solar, biomass and geothermal all come next at around $0.10/kWh, which are followed closely by offshore wind at around $0.13/kWh. Compare these to costs from fossil fuel sources which could reach well over $0.15/kWh (from the latest International Renewable Energy Agency (IRENA) report entitled, “Renewable Power Generation Costs’).
Above, an extract of the many charts and data sample sets provided in the IRENA Renewable Power Generation Costs Report from 2018
Where natural conditions and a friendly regulatory framework for renewables exists, one finds wind and solar costs lowering further – to around $0.03-0.04/kWh. Even the oil mecca Saudi Arabia is seeing solar plants springing up at a cost of just $0.03/kWh. All of these numbers lend validity to IRENA’s prediction in 2018 that clean energy would be cheaper than fossil fuels by 2020. (Even concentrated solar power, the most expensive renewables technology, now competes with coal and oil at an average development cost of $0.18/kWh.)
According to IRENA, the current downward renewable cost trends will continue for at least a decade to come, as three-quarters of onshore wind projects and four-fifths of solar projects next year will bring energy at a lower cost than oil, coal or gas plants. According to IRENA, all of these projects “are set to do so without financial assistance.”
What We’re Reading: “Renewable Energy Costs Take Another Tumble, Making Fossil Fuels Look More Expensive Than Ever” as published on Forbes