Victor Uzoho
Today, renewables have become more competitive in the energy landscape than they were 10 years ago, as there have been improvements in the competitiveness of solar and wind power technologies.
Between 2010 and 2020, the cost of electricity from utility-scale solar PhotoVoltaics (PV) fell by 85%, followed by Concentrating Solar Power (CSP) by 68%, onshore wind 56%, and offshore wind by 48%, the International Renewable Energy Agency (IRENA), disclosed in its recent ‘Renewable Power Generation Costs 2020’ report.
Since 2010, globally, a cumulative total of 644 gigawatts (GW) of renewable power generation capacity have been added with estimated costs lower than the cheapest fossil fuel-fired option in each respective year.
The report said the decline continued in 2020, as the cost of electricity from utility-scale solar PV fell by 7% year-on-year, while offshore wind fell by 9%, onshore wind by 13% and CSP by 16%.
The last decade saw CSP, offshore wind, and utility-scale solar PV all joining onshore wind in the cost range for new capacity fired by fossil fuels, when calculated without the benefit of financial support or subsidies.
Also, data from IRENA’s Renewable Cost Database showed that existing coal plants are increasingly vulnerable to being undercut by new renewables, as analysis showed that up to 800 gigawatts (GW) of existing coal-fired capacity could be economically replaced by new renewables capacity, saving the electricity system up to $32 billion per year and reducing carbon dioxide (CO2) emissions by up to 3 gigatonnes.
Speaking on the development, Director-General, IRENA, Francesco La Camera, said: “Renewables present countries tied to coal with an economically attractive phase-out agenda that ensures they meet growing energy demand, while saving costs, adding jobs, boosting growth and meeting climate ambition.
“I am encouraged that more and more countries opt to power their economies with renewables and follow IRENA’s pathway to reach net zero emissions by 2050.”
He noted that this would provide the 20% emission reduction needed by the Year 2030 for the 1.5°C climate pathway outlined in its World Energy Transitions Outlook.
According to him, there are slim chances that coal assets would be part of the energy future, as its redevelopment with carbon capture and storage would only increase costs while integrating very high shares of renewables would be cheaper.
He said from analysis, only very low-cost renewables cannot form the backbone of a decarbonised electricity system, noting that a radical future energy system where renewable hydrogen, derived from very low-cost renewable electricity and modern biomass would unlock an affordable pathway to a 1.5°C future.
Meanwhile, the report said between 2000 and 2020, renewable power generation capacity worldwide increased from 754 to 2799 GW, driven by the sharp fall in cost, steadily improving technologies, economies of scale, competitive supply chains, and improved developer experience.
Last year, the global weighted-average Levelized Cost of Electricity (LCOE) from new capacity additions of onshore wind fell by 13%, compared to 2019. Over the same period, the LCOE of offshore wind fell by 9% and that of utility-scale solar PV by 7%.
We cannot allow having a dual-track for energy transition where some countries rapidly turn green and others remain trapped in the fossil-based system of the past. Global solidarity will be crucial, from technology diffusion to financial strategies and investment support.
“We are far beyond the tipping point of coal,” La Camera continued. “Following the latest commitment by G7 to net-zero and stop global coal funding abroad, it is now for G20 and emerging economies to match these measures. We cannot allow having a dual-track for energy transition where some countries rapidly turn green and others remain trapped in the fossil-based system of the past. Global solidarity will be crucial, from technology diffusion to financial strategies and investment support. We must make sure everybody benefits from the energy transition.”
Going by IRENA’s analysis, about 800 GW of existing coal-fired capacity has operating costs higher than new utility-scale solar PV and onshore wind, including $0.005/kWh for integration costs.
The analysis spans around 20 000 renewable power generation projects from around the world, along with data from 13 000 auctions and power purchase agreements for renewables.
