In most parts of the world, renewables are the lowest-cost source of new power generation. As costs for solar and wind technologies continue falling, this will become the case in even more countries, concludes the International Renewable Energy Agency (IRENA) in its new report: Renewable Power Generation Costs in 2018.

The report draws on IRENA’s cost database of around 17,000 renewable power generation projects and 9,000 auction and power purchase agreements for renewable power and shows that costs from all commercially available renewable power generation technologies declined in 2018. 

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The global weighted-average cost of electricity declined 26 per cent year-on-year for concentrated solar power (CSP), followed by bioenergy (-14 per cent), solar photovoltaic (PV) and onshore wind (both -13 per cent), hydropower (-12 per cent), geothermal and offshore wind (both -1 per cent), the report finds.

Source: Global electricity costs in 2018, IRENA

Unlocking low-cost decarbonisation of industry, transport and buildings

Very low, and falling, costs of electricity for solar PV and onshore wind, as well as cost reductions for CSP and offshore wind until 2020 and beyond, make renewable power the competitive backbone of the global energy sector transformation.

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Besides making the decarbonisation of the electricity sector economically attractive, these cost decreases unlock low-cost decarbonisation in the end-use sectors of industry, transport and buildings as the costs of electric end-use technologies such as electric vehicles and heat pumps.

IRENA’s latest analysis of the world’s pathway to a sustainable energy sector  therefore sees an increase in electrification, with the share of electricity growing from less than a fifth of final energy demand to nearly half in 2050, on the back of cost-competitive renewables.

Key findings in the report:

• Onshore wind and solar PV power are now, frequently, less expensive than any fossil-fuel option, without financial assistance.
• New solar and wind installations will increasingly undercut even the operating-only costs of existing coal-fired plants.
• Low and falling technology costs make renewables the competitive backbone of energy decarbonisation – a crucial climate goal.
• Cost forecasts for solar PV and onshore wind continue to be revised as new data emerges, with renewables consistently beating earlier expectations.

Source: IRENA: Renewable Power Generation Costs in 2018