162 GW or 62 per cent of total renewable power generation added in 2020 had lower costs than the cheapest new fossil fuel option, says new report by the International Renewable Energy Agency (IRENA). Renewables would bring cost savings of USD 156 billion to emerging economies.
The share of renewable energy that achieved lower costs than the most competitive fossil fuel option doubled in 2020, a new report by the International Renewable Energy Agency (IRENA) shows. 162 gigawatts (GW) or 62 per cent of total renewable power generation added last year had lower costs than the cheapest new fossil fuel option.
Renewable Power Generation Costs in 2020 shows that costs for renewable technologies continued to significantly fall year-on-year. Concentrating solar power (CSP) fell by 16 per cent, onshore wind by 13 per cent, offshore wind by 9 per cent and solar PV by 7 per cent. With costs at low levels, renewables increasingly undercut existing coal’s operational costs too. Low-cost renewables give developed and developing countries a strong business case to power past coal in pursuit of a net zero economy. Just 2020’s new renewable project additions will save emerging economies up to USD 156 billion over their lifespan.
“Today, renewables are the cheapest source of power,” said IRENA’s Director-General Francesco La Camera. “Renewables present countries tied to coal with an economically attractive phase-out agenda that ensures they meet growing energy demand, while saving costs, adding jobs, boosting growth and meeting climate ambition. I am encouraged that more and more countries opt to power their economies with renewables and follow IRENA’s pathway to reach net zero emissions by 2050.”
The general cost reduction comes following an unprecedented acceleration of the energy transition over the last ten year. This is mainly driven by the growing speed of renewable energy penetration – particularly wind and solar – and the important strides made in energy access.
Heading the ranking on global energy transition, especially the Nordic region outperforms their peers with Sweden (1), Norway (2) and Denmark (3) taking on the top three positions, according to the World Economic Forum.
Denmark’s progress is mainly credited to its improved energy system performance and sustainability outcomes thanks to a stable regulatory environment, diversified energy mix and cost-reflective energy pricing.
– related news: Denmark in global top three on energy transition
A record year to enter “the decades of renewables”
“Despite the challenges and the uncertainty of 2020, renewable energy emerged as a source of undeniable optimism for a better, more equitable, resilient, clean and just future” – IRENA Director-General Francesco La Camera
Global renewable energy capacity additions in 2020 beat earlier estimates and all previous records despite the economic slowdown that resulted from the COVID-19 pandemic. According to yet a report released by IRENA in April this year, the world added more than 260 gigawatts of renewable energy capacity last year, beating the previous record from 2019 by almost 50 per cent.
IRENA’s annual Renewable Capacity Statistics 2021 shows that renewable energy’s share of all new generating capacity rose considerably for the second year in a row. More than 80 per cent of all new electricity capacity added last year was renewable, with solar and wind accounting for 91 per cent of new renewables.
Renewables’ rising share of the total is partly attributable to net decommissioning of fossil fuel power generation in Europe, North America and for the first time across Eurasia (Armenia, Azerbaijan, Georgia, Russian Federation and Turkey). Total fossil fuel additions fell to 60 GW in 2020 from 64 GW the previous year highlighting a continued downward trend of fossil fuel expansion.
In Denmark, A little more than 50 per cent of the electricity was powered by wind and solar in 2020. 2020 thereby surpassed 2019 as the greenest year ever in Danish electricity history.
– related news: The world added record new renewable energy capacity in 2020