According to the International Renewable Energy Agency (IRENA) renewable energy is already the cheapest source of electricity in many parts of the world, with global technology costs having fallen to a record low last year.
The thought of such a situation may be hard for many in Australia to believe given the recent attitudes expressed by the newly re-elected conservative Liberal-National government.
Reuters Newsagency reports the IRENA study showed electricity generated by onshore wind and solar photovoltaic (PV) technologies will in the next year be consistently cheaper than from any fossil fuel source, boosting the case for energy sources that do not emit carbon.
The trend for cut-price renewable energy is already set but the report by IRENA gives fresh evidence of the speed of the decline, driven by increased production runs and technology improvements.
IRENA director-general Francesco La Camera welcomed the report’s findings, describing renewable power as “the backbone of any development that aims to be sustainable”.
“We must do everything we can to accelerate renewable energy if we are to meet the climate objectives of the Paris Agreement,” he said.
“Today’s report sends a clear signal to the international community: Renewable energy provides countries with a low-cost climate solution that allows for scaling up action.”
“Onshore wind and solar PV are set by 2020 to consistently offer a less expensive source of new electricity than the least-cost fossil-fuel alternative without financial assistance,” said IRENA, a government-backed body that aims to support countries in their transition to sustainable energy sources.
The global weighted average cost of electricity generated by concentrated solar power fell by 26 per cent last year from a year earlier, data compiled by the agency showed.
Reuters reports bioenegy fell by 14 per cent, solar PV and onshore wind by 13 per cent, hydropower by 12 per cent and geothermal and offshore wind by one per cent.
Costs of US$0.03 to US$0.04 per kilowatt hour (kWh) for onshore wind and solar PV are already possible in some parts of the world.
Record-low auction prices for solar PV over the past couple of years in Chile, Mexico, Peru, Saudi Arabia, and the United Arab Emirates for example have seen a cost as low as US$0.03/kWh, IRENA found.
Over three quarters of onshore wind and four fifths of large-scale solar PV capacity to be commissioned next year shows lower prices than the cheapest new coal-fired, oil or natural gas sources, the report said.
The report comes as Australia’s Liberal-National government is again trying to generate support for coal-fired power plants and continues to consider the development of large-scale coal mines.
At the start of last year, IRENA forecast the global average cost of electricity could fall to less than US$0.049/kWh for onshore wind and US$0.055/kWh for solar PV by 2020.
“A year later, the potential value for onshore wind in 2020 has dropped a further eight per cent to US$0.045/kWh, while that of solar PV has dropped 13 per cent to US$0.048/kWh,” said the report, based on data from IRENA’s own members, business journals, industry groups, consultancies, governments, auctions and tenders.
As well as 160 countries, IRENA’s membership includes utilities, project developers, research institutes and companies, all of which provided data for its Renewable Cost Database.
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