After years of steady cost decline, renewable power technologies are becoming an increasingly competitive way to meet new generation needs, says the International Renewable Energy Agency (IRENA).
According to the findings of a IRENA study, Renewable Power Generation Costs in 2017, electricity costs from renewable energy generation have continued to fall for projects commissioned in 2017.
The three main drivers of decreases in renewable energy costs include technology improvements, competitive procurement, and a large base of experienced, internationally active project developers.
IRENA predicts the costs of renewable energy to continue on the decline through to 2020.
Decrease in solar and wind costs
The global average levelised cost of electricity of utility-scale solar photovolatic (PV) has fallen by 73% since 2010 to $0,10KWh for new projects commissioned in 2017.
This is a result of 81% decrease in solar PV module prices since the end of 2009.
The reduction in balance of system costs has also led to the decreases in costs of solar PV.
Since 2006, the global solar PV market grew from 6.1GW to 291GW in 2016.
Record low auction prices for solar in Dubai, Mexico, Peru, Chile, Abu Dhabi and South Arabia in 2016 and 2017 confirm that the levelised cost of energy (LCOE) can be reduced to $0.03KWh from 2018 onward.
IRENA forecasts renewable power generation technologies currently in commercial use to fall within the fossil fuel-fired cost range by 2020.
Onshore wind will continue to be one of the most competitive sources of new generation with LCOEs as low as $0.03KWh in Brazil, Canada, Germany, India, Mexico and Morocco.
The decreases in renewable energy highlight favourable regulatory and institutional framework including strong local civil engineering base, favourable taxation regimes, low project development costs and excellent resources.
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