Quantcast

All Renewables Will Be Cost Competitive With Fossil Fuels by 2020

Renewable Energy
Pixabay

Generating electricity from renewable energy sources is not only better for the environment compared to fossil fuels, but it will also be consistently cheaper in just a few years, according to a new report.

According to a cost analysis from the International Renewable Energy Agency (IRENA), the best onshore wind and solar photovoltaic (PV) projects could deliver electricity for $0.03 per kilowatt-hour (kWh) by 2019, much lower than the current cost of power from fossil fuels, which ranges from $0.05 to $0.17 per kWh.


The analysis highlights the dramatic dip in solar and wind prices over the last decade. Onshore wind has fallen by around a quarter since 2010, with solar PV electricity costs falling by 73 percent in that time. Additionally, solar PV costs are expected to halve by 2020.

In the last 12 months alone, the global weighted average costs of onshore wind and solar PV have stood at $0.06 and $0.10 per kWh, respectively. Recent auction results also suggest future projects will significantly undercut these averages—onshore wind is now routinely commissioned for $0.04 per kWh. Additionally, record low prices for solar PV in Abu Dhabi, Chile, Dubai, Mexico, Peru and Saudi Arabia have made $0.03 kWh (and below) the new benchmark.

Other types of renewable technologies—including hydropower ($0.05 per kWh), bioenergy and geothermal ($0.07 per kWh)—have also been cost competitive with fossil fuels over the last 12 months, the report found.

Remarkably, IRENA projects that all forms of renewables will compete with fossils on price by 2020.

"This new dynamic signals a significant shift in the energy paradigm," Adnan Z. Amin, IRENA director-general, said. "These cost declines across technologies are unprecedented and representative of the degree to which renewable energy is disrupting the global energy system."

According to the report, the cost reductions have been driven by a number of factors, including competitive procurement practices, the emergence of a large base of experienced medium-to-large project developers competing for global market opportunities, and continued technological advancements.

"Turning to renewables for new power generation is not simply an environmentally conscious decision, it is now—overwhelmingly—a smart economic one," Amin continued.

"Governments around the world are recognizing this potential and forging ahead with low-carbon economic agendas underpinned by renewables-based energy systems. We expect the transition to gather further momentum, supporting jobs, growth, improved health, national resilience and climate mitigation around the world in 2018 and beyond."

The report was released Saturday, the first day of IRENA's Eighth Assembly in Abu Dhabi, where more than 1,100 representatives of governments from 150 countries met to reaffirm the global renewable energy agenda and to make concrete steps to accelerate the global energy transition.

Here are highlights from the report:

  • The global weighted average levelized cost of electricity (LCOE) of utility-scale solar PV has fallen by 73 percent between 2010 and 2017 to $0.10/kWh.
  • The average cost of electricity from onshore wind fell by 23 percent between 2010 and 2017. Projects are now routinely commissioned at $0.04/kWh and the global weighted average is around $0.06/kWh.
  • By 2019, the best onshore wind and solar PV projects will be delivering electricity for an equivalent of $0.03/kWh, or less. New bioenergy and geothermal projects commissioned in 2017 had global weighted average costs of around $0.07/kWh.
  • Record low prices for solar PV in Abu Dhabi, Chile, Dubai, Mexico, Peru and Saudi Arabia have made $0.03 kWh (and below) the new benchmark.
  • 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 to $0.10/kWh range.

EcoWatch Daily Newsletter

Tuna auctions are a tourist spectacle in Tokyo. Outside the city's most famous fish market, long queues of visitors hoping for a glimpse of the action begin to form at 5 a.m. The attraction is so popular that last October the Tsukiji fish market, in operation since 1935, moved out from the city center to the district of Toyosu to cope with the crowds.

Read More Show Less

gmnicholas / E+ / Getty Images

By Nicole Greenfield

Kristan Porter grew up in a fishing family in the fishing community of Cutler, Maine, where he says all roads lead to one career path: fishing. (Porter's father was the family's lone exception. He suffered from terrible seasickness, and so became a carpenter.) The 49-year-old, who has been working on boats since he was a kid and fishing on his own since 1991, says that the recent warming of Maine's cool coastal waters has yielded unprecedented lobster landings.

Read More Show Less
Sponsored
TeamDAF / Getty Images Plus

The climate crisis is getting costly. Some of the world's largest companies expect to take over one trillion in losses due to climate change. Insurers are increasingly jittery and the world's largest firm has warned that the cost of premiums may soon be unaffordable for most people. Historic flooding has wiped out farmers in the Midwest.

Read More Show Less
Aerial view of lava flows from the eruption of volcano Kilauea on Hawaii, May 2018. Frizi / iStock / Getty Images

Hawaii's Kilauea volcano could be gearing up for an eruption after a pond of water was discovered inside its summit crater for the first time in recorded history, according to the AP.

Read More Show Less
The Eqip Sermia Glacier is seen behind a moraine left exposed by the glacier's retreat during unseasonably warm weather on Aug. 1 at Eqip Sermia, Greenland. Sean Gallup / Getty Images

Andrew Yang's assertion that people move away from the coast at the last Democratic debate is the completely rational and correct choice for NASA scientists in Greenland.

Read More Show Less
Sponsored
hadynyah / E+ / Getty Images

By Johnny Wood

The Ganges is a lifeline for the people of India, spiritually and economically. On its journey from the Himalayas to the Bay of Bengal, it supports fishermen, farmers and an abundance of wildlife.

The river and its tributaries touch the lives of roughly 500 million people. But having flowed for millennia, today it is reaching its capacity for human and industrial waste, while simultaneously being drained for agriculture and municipal use.

Here are some of the challenges the river faces.

Read More Show Less

Fibonacci Blue / CC BY 2.0

By Jake Johnson

As a growing number of states move to pass laws that would criminalize pipeline protests and hit demonstrators with years in prison, an audio recording obtained by The Intercept showed a representative of a powerful oil and gas lobbying group bragging about the industry's success in crafting anti-protest legislation behind closed doors.


Speaking during a conference in Washington, DC in June, Derrick Morgan, senior vice president for federal and regulatory affairs at the American Fuel & Petrochemical Manufacturers (AFPM), touted "model legislation" that states across the nation have passed in recent months.

AFPM represents a number of major fossil fuel giants, including Chevron, Koch Industries and ExxonMobil.

"We've seen a lot of success at the state level, particularly starting with Oklahoma in 2017," said Morgan, citing Dakota Access Pipeline protests as the motivation behind the aggressive lobbying effort. "We're up to nine states that have passed laws that are substantially close to the model policy that you have in your packet."


The audio recording comes just months after Texas Gov. Greg Abbott signed into law legislation that would punish anti-pipeline demonstrators with up to 10 years in prison, a move environmentalists condemned as a flagrant attack on free expression.

"Big Oil is hijacking our legislative system," Dallas Goldtooth of the Indigenous Environmental Network said after the Texas Senate passed the bill in May.

As The Intercept's Lee Fang reported Monday, the model legislation Morgan cited in his remarks "has been introduced in various forms in 22 states and passed in ... Texas, Louisiana, Oklahoma, Tennessee, Missouri, Indiana, Iowa, South Dakota, and North Dakota."

"The AFPM lobbyist also boasted that the template legislation has enjoyed bipartisan support," according to Fang. "In Louisiana, Democratic Gov. John Bel Edwards signed the version of the bill there, which is being challenged by the Center for Constitutional Rights. Even in Illinois, Morgan noted, 'We almost got that across the finish line in a very Democratic-dominated legislature.' The bill did not pass as it got pushed aside over time constraints at the end of the legislative session."

Reposted with permission from our media associate Common Dreams.

DESIREE MARTIN / AFP / Getty Images

Wildfires raging on Gran Canaria, the second most populous of Spain's Canary Islands, have forced around 9,000 people to evacuate.

Read More Show Less