Prices of Renewable Energy Drop as It Becomes Competitive with Fossil Fuels

A fresh report says that the cost of generating renewable energy is dropping at an “unprecedented” rate. The report also says that by 2020, all renewable technologies will already be price competitive with traditional fossil fuels.

According to a report that was published today by the International Renewable Energy Agency (Irena), the price of generating power from onshore wind has dropped by about a quarter, while costs of solar photovoltaic (PV) electricity have fallen by 73 percent since 2010.

Within only two years, Irena anticipates costs of solar energy generation to halve, and it said that the best onshore wind and solar PV projects could deliver electricity for an equivalent of 3 cents or 2 pence per kilowatt hour (kWh), or less.

The report stated that the current cost spectrum for fossil fuel power generation ranges between 5 to 17 cents per kWh. In comparison, by 2020, all current commercial forms of green energy are likely to generate in the range between 3 to 10 cents per kWh.

“Turning to renewables for new power generation is not simply an environmentally conscious decision, it is now – overwhelmingly – a smart economic one,” stated Irena’s director general, Adnan Amin.

“Governments around the world are recognising 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 prices have fallen because of more competitive bidding processes for contracts, an emerging base of developers that are joining competitions for global market opportunities and constant advancements in technology.

Amin stated: “This new dynamic signals a significant shift in the energy paradigm.

“These cost declines across technologies are unprecedented and representative of the degree to which renewable energy is disrupting the global energy system.”