|The IEA says these ones will become cheaper. Photo credit: K.H. Reichert via Flickr.|
By Anders Lorenzen
This is what clean energy experts and economists describe as a game changer: when the costs of renewables become cheaper than that of fossil fuels.
Now The International Energy Agency (IEA) predicts that such a day is near. Their research says that the price of producing electricity from wind and solar has come down rapidly in the last five years, and by so much so that it is narrowing the gap between renewables and fossil fuels and nuclear.
It is particularly the cost of solar PV, which has come down rapidly. These findings are released by the Paris based organization, Projected Costs of Generating Electricity.
The report states that the median cost of producing so-called baseload power, being available all the time from fossil fuel produced sources such as natural gas, coal and nuclear power, was about $100 a megawatt-hour for 2015, while it was $200 for solar. This had dramatically dropped from $500 in 2010. But costs for solar would of course vary greatly depending on where it is produced. For example, commercial rooftop solar installations generate power for $311.77 per megawatt-hour in Belgium compared to $166.70 in much sunnier Spain.
The report also found, that not only are renewables becoming cheaper, but that fossil fuels are also becoming more expensive. During the very same five-year period the median cost for baseload fossil fuel-powered generation rose. That is a trend that is set to continue if power plants, in order to comply with national climate targets, install Carbon Capture and Storage (CCS).
In the meantime solar and wind will continue their downward cost. The agency predicts that utility scale solar would be able to produce electricity at $100 a megawatt-hour before 2025 in the sunniest areas, while rooftop solar could join that club five years later.
But another of the agency’s findings might not please some environmentalists. It is a fact, that despite environmental groups having claimed otherwise, the cost of nuclear power has neither increased or decreased – the cost is roughly on par with those recorded in 2010, IEA concludes.
These findings would be a welcome boost for negotiators from the 192 UN nations, who in December, in Paris, will be tasked with negotiating a global deal on tackling climate change.
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