According to a new report by the International Renewable Energy Agency (IRENA), almost two-thirds of wind and solar projects built around the world in 2020 will be able to generate cheaper electricity than even the world’s cheapest new coal plants.
What is Happening?
- The report found that the falling cost of new wind farms and solar panels meant that 62% of new renewable energy projects could undercut the cost of up to 800GW worth of coal plants. This is enough to supply the UK’s electricity needs 10 times over.
- According to the report, solar costs fell by 16% last year, while onshore wind costs fell 13% and offshore wind 9%.
- In less than 10 years, the cost of large-scale solar power has fallen by more than 85%, while onshore wind has fallen almost 56% and offshore wind has dropped 48%.
Francesco La Camera, Irena’s director-general, said the agency’s latest research proved the world was “far beyond the tipping point of coal”. He said: “Today renewables are the cheapest source of power. 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.”
- The report found that in Europe, the cost of a new coal plant would be well above the cost of new wind and solar farms. In the US, renewable energy could undercut between three-quarters and 91% of existing coal-fired power plants, while in India, renewable energy would be cheaper than between 87% and 91% of new plants.
- Phasing out 800GW of coal power capacity would be the equivalent of removing 9% of the world’s energy-related emissions in 2020 or 20% of the carbon savings needed by 2030 to help limit global heating to 1.5C above pre-industrial levels.
- The cost of renewable energy is predicted to continue to fall in the coming years. The report says that over the next two years three-quarters of all new solar power projects will be cheaper than new coal power plants, and onshore wind costs will be a quarter lower than the cheapest new coal-fired option.
The report says, “The trend confirms that low-cost renewables are not only the backbone of the electricity system but that they will also enable electrification in end uses like transport, buildings and industry and unlock competitive indirect electrification with renewable hydrogen.”
Wind and solar energy are set to gain cost competitiveness over fossil fuel and nuclear power in 2021. It is looking increasingly likely that it will be cheaper to add new wind and solar capacity in comparison to new fossil fuel power plants and nuclear power plants.