Renewable power is increasingly cheaper than any new electricity capacity based on fossil fuels, IRENA’s newly launched Renewable Power Generation Costs in 2019 finds.
The report highlights that new renewable power generation projects now increasingly undercut existing coal-fired plants. On average, new solar photovoltaic (PV) and onshore wind power cost less than keeping many existing coal plants in operation, and auction results show this trend accelerating – reinforcing the case to phase-out coal entirely. Next year, up to 1200 gigawatts (GW) of existing coal capacity could cost more to operate than the cost of new utility-scale solar PV, the report shows.
Replacing the costliest 500 GW of coal with solar PV and onshore wind next year would cut power system costs by up to USD 23 billion every year and reduce annual emissions by around 1.8 gigatons (Gt) of carbon dioxide (CO2), equivalent to 5% of total global CO2 emissions in 2019. It would also yield an investment stimulus of USD 940 billion, which is equal to around 1% of global GDP.
- Renewable electricity costs have fallen sharply over the past decade, driven by improving technologies, economies of scale, increasingly competitive supply chains and growing developer experience.
- Renewable power generation continues to grow in 2020, despite the COVID-19 pandemic.
- Retiring the least competitive 500 GW of existing coal-fired plants and replacing them with solar PV and onshore wind would reduce system generation costs between USD 12 billion and USD 23 billion per year, depending on coal prices.
- Electricity costs for solar and wind power have continued to fall significantly between 2010 and 2019; 47% declines for concentrated solar power, 82% for solar PV, 39% for onshore wind, and 29% declines for offshore wind.
Along with reviewing overall cost trends and their drivers, the report analyses cost components in detail. The analysis spans around 17,000 renewable power generation projects from around the world, along with data from 10,700 auctions and power purchase agreements for renewables.
Download Renewable Power Generation Costs in 2019.