The report, “Renewable Power Generation Costs in 2017,” was released on the first day of IRENA’s Eighth Assembly in Abu Dhabi on January 13. The report includes the latest trends for each of the main renewable power technologies, based on the latest cost and auction price data.
The report highlights other forms of renewables, such as bioenergy, geothermal and hydropower projects, that have successfully competed head-to-head on fossil fuel costs in the last 12 months.
In a particularly good piece of news, the report notes that by 2019, the best onshore wind and solar PV projects will be delivering electricity for $0.03/kWh – significantly below the current cost of power from fossil fuels.
A new age of renewable energy
IRENA points out that onshore wind and solar PV costs now stands at USD 6 cents and USD 10 cents per kWh respectively, with recent auction results suggesting future projects will significantly undercut these averages. They cite recent onshore wind cost of 4 cents per kWh, while the current cost spectrum for fossil fuel power generation ranges from USD 5-17 cents per kWh.
“This new dynamic signals a significant shift in the energy paradigm,” said Adnan Z. Amin, IRENA Director-General. “These cost declines across technologies are unprecedented and representative of the degree to which renewable energy is disrupting the global energy system.”
IRENA also assessed the project-level cost data for about 15,000 utility-scale projects globally. The study found the levelized cost of energy (LCOE) fell over the period covering 2010-2017. In some solar PV utility-scale projects, the drop was “precipitous.” IRENA actually used the word, “remarkable,” the numbers were so astounding.
The data shows the average LCOE for utility-scale solar PV decreased to $0.10 per kilowatt-hour, a drop of 73 percent between 2010 and 2017.
It should be noted that GTM Research’s most recent Global Solar Demand Monitor report, published in December 2017, underscores the downward trend. The report cites Q4 2017 utility-scale solar prices ranging from $30 per megawatt-hour in Mexico to a high of $151 per megawatt-hour in Japan. That comes to $0.03 per kilowatt-hour and $0.15 per kilowatt-hour, respectively.
Basically, the big news is that by 2020, ” project and auction data suggest that all currently commercialized renewable power generation technologies will be competing – and even undercutting – fossil fuels by generating in the range $0.03/kWh to $0.10/kWh.”
“Turning to renewables for new power generation is not simply an environmentally conscious decision – it is now, overwhelmingly, a smart economic one,” adds Amin. We have to agree with that assessment.
