Houston — Falling renewable power costs could be the solution to boosting global climate action, the International Renewable Energy Agency said in a report released Wednesday.
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Register NowIn 2018 the global weighted-average cost of electricity from solar photovoltaics and from onshore wind declined by 13% compared to 2017, the report said, and cost reductions for these two technologies "are set to continue to decline into the next decade."
"Over three-quarters of the onshore wind and four-fifths of the solar PV capacity that is due to be commissioned [in 2020] will produce power at lower prices than the cheapest new coal, oil or natural gas options," the IRENA report said. "Crucially, they are set to do so without financial assistance."
IRENA, based in Abu Dhabi, is an inter-governmental body with around 160 members. In its report it said that it continues to revise its cost forecasts for solar PV and onshore wind, but renewables have been "beating earlier expectations."
At the beginning of 2018, IRENA's analysis of auction and PPA data suggested that the global-weighted average cost of electricity could fall to just under five US cents per kilowatt-hour for onshore wind and five and a half cents per kilowatt-hour for solar PV in 2020.
At the beginning of 2019, the "potential value" for onshore wind in 2020 had dropped a further 8%, to four and a half cents per kilowatt-hour, while that of solar PV dropped 13%, to less than five cents per kilowatt-hour.
The report said that onshore wind and solar PV costs between three and four cents per kilowatt hour are "already possible" in areas with good resources and enabling regulatory and institutional frameworks.
'BACKBONE' OF A TRANSFORMATION
IRENA said that electrification on the basis of cost-competitive renewables is the "backbone of energy transformation and a key low-cost decarbonisation solution in support of the climate goals set out in the Paris Agreement."
In a report released in April titled, Global Energy Transformation: A Roadmap to 2050," IRENA researchers argued that the increased use of onshore wind and solar, combined with intensified electrification, could "prove decisive for the world to meet key climate goals by 2050."
"Renewables already make up more than half of newly installed power-generation capacity," the report noted. "Yet their overall share in the energy mix (including power, heat and transport) needs to grow six times faster."
National climate commitments under the Paris Agreement largely hinge on energy decarbonisation. The 2015 climate deal called for keeping the rise in average global temperatures "well below" two degrees Celsius (2 degrees C) during the present century, compared to pre-industrial levels.
"Achieving a climate-safe future thus depends on swift global action," the report said.
IRENA said that based on its analysis, energy-related carbon-dioxide emissions would have to decline 70% by 2050, compared to current levels, to meet climate goals.
"A large-scale shift to electricity from renewables could deliver 60% of those reductions; 75% if renewables for heating and transport are factored in; and 90% with ramped-up energy efficiency," IRENA said.
WIND, SOLAR PLAYING A ROLE IN THE US
"This report makes clear that we've come a long way in reducing solar costs to a point where we can compete with traditional sources of energy," said Dan Whitten, vice president of public affairs for the Solar Energy Industries Association in Washington DC.
"However, we have more work to do to compete on price in every market, and need the right policies in place to deploy the solar power required to meet decarbonization goals."
According to the US Energy Information Administration, onshore wind generation rose from 55 million MWh in 2008 to 275 million MWh in 2018, representing 6.5% of total electricity generation.
Solar generation has increased from 2 million MWh in 2008 to 96 million MWh in 2018, while accounting for 2.3% of electricity generation in 2018.
After a 10-year build up, combined zero-emission onshore wind and solar generation represented 8.8% of total US generation at the end of 2018.
A March 19 EIA report said that annual CO2 emissions from the electric power sector totaled 2.37 billion metric tons in 2008. However, coal-fired power plant retirements combined with increased use of gas-fired generation and more onshore wind and solar cut CO2 emissions in 2018 to a 24-year low of 1.76 billion mt, a decline of 610 million mt.
-- Jeffrey Ryser, jeffrey.ryser@spglobal.com
-- Edited by Gail Roberts, newsdesk@spglobal.com