Photo credit: International Renewable Energy Agency (IRENA).

By Anders Lorenzen

The cost of renewable energy continues to plummet, making climate action more possible, so says a new report from the International Renewable Energy Agency (IRENA).

The report, ‘Renewable Power Generation Costs in 2018’, details how the prices of renewable energy technologies dropped to a record low last year. The global weighted-average cost of electricity from concentrating solar power (CSP) declined by 26%, bioenergy by 14%, solar photovoltaics (PV) and onshore wind by 13%, hydropower by 12% and geothermal and offshore wind by 1%, respectively.

The authors of the report explain that when it comes to solar and wind power technologies, we can expect to see the cost continue to decline in the coming decade, making the case for those technologies even stronger. According to the organisation’s global database, over three-quarters of the onshore wind and four-fifths of the solar PV capacity that is due to be commissioned next year will produce power at lower prices than the cheapest new coal, oil or natural gas options. Crucially, as many countries are either getting rid of their subsidy schemes or vastly reducing them, these projects are subsidy-free. In terms of onshore wind and solar PV, the case for both technologies is that it is possible to achieve costs in the region of between three and four US cents per kilowatt hour. It cites the examples of what it calls record-low auction prices for solar PV in Chile, Mexico, Peru, Saudi Arabia, and the United Arab of Emirates. These countries have seen the cost of electricity levelling out as low as three US cents per kilowatt hour (USD 0.03/kWh).

The report further states that these cost reductions are crucial in meeting the emissions reductions set out in the Paris Agreement. IRENA’s Director-General Francesco La Camera commented: “We must do everything we can to accelerate renewables if we are to meet the climate objectives of the Paris Agreement. Today’s report sends a clear signal to the international community: Renewable energy provides countries with a low-cost climate solution that allows for scaling up action.”

India is soon expected to overtake China as the world’s most populous country. As the Indian demand for energy is probably higher than anywhere else on the planet, India is also the country where the cost of deploying renewable energy technologies have declined the most.