Recently, the International Renewable Energy Agency (IRENA) released the 2019 Renewable Energy Generation Cost Report. Report data shows that since 2010, photovoltaic costs have fallen by 82%, concentrated solar energy (CSP) has fallen by 47%, onshore wind energy has fallen by 39%, and offshore wind energy has fallen by 29%.
These figures are based on the cost and tariffs of 17,000 renewable energy project bid reports last year. These projects will eventually reach 1.7GW of clean power generation capacity.
IRENA said that the cost reduction in the past decade was due to technological advancement, economies of scale, supply chain competition and the growing experience of developers. “Compared with ten years ago, the same amount of capital invested in renewable energy now generates much more new capacity. In 2010, the installed capacity of renewable energy in the world was 88GW, which required the equivalent of USD 210 billion. . Last year, the installed capacity doubled and the investment increased by only 20%.”
According to IRENA data, from 2010 to 2019, the global solar capacity increased from 40GW to 580GW, an increase of 14 times. During the same period, component prices fell by 90%, and system (BoS) costs also fell.
At present, the average levelized cost (LCOE) of large-scale solar energy is US$0.068/kWh, compared with US$0.378/kWh in 2010. Between 2018 and last year alone, the cost dropped by 13.1%.
During this period, the national weighted average cost of large-scale solar power in India fell by 85%. Other significant declines include China, Italy, and South Korea, where solar energy prices fell by 82%, as well as Spain (81%), Australia (78%), France (77%), Germany (73%), and the United States (66%). Emerging markets also benefited from falling prices. For example, Vietnam’s solar cost has fallen by 55% since 2016.
The report also pointed out that the installed cost per kilowatt of large-scale solar projects fell below US$1,000 for the first time last year to US$995. This figure is 18% lower than in 2018 and 79% cheaper than the cost of the project a decade ago.
The report pointed out that from 2010 to last year, residential solar costs fell by 47-80%, depending on different regions.
The IRENA study shows: “Compared with existing coal-fired power plants, new projects that use renewable energy to produce energy are becoming cheaper today. On average, commissioning new photovoltaic and wind power generation facilities is more cost effective than maintaining many coal-fired power plants. Operation is cheap.”
Nearly 56% of the large-scale renewable energy plants that went into operation last year have electricity production costs lower than the lowest-cost alternatives to fossil fuels. IRENA said that the situation in 2010 was very different, when the cost of solar power for large-scale projects was 7.6 times that of fossil fuels.
“Next year, running 1,200 GW of existing capacity in coal-fired power plants may be more expensive than investing in new photovoltaic installations on an industrial scale,” the renewable energy agency said. “Coal-fired power plants are not economically feasible.”
IRENA said that although the epidemic is expected to slow the deployment of solar and wind energy this year, the public health crisis has not shown signs of slowing down the trajectory of renewable energy costs.
The latest tender and power purchase agreement (PPA) indicate that the average price of solar projects that will be commissioned next year is $0.039/kWh, which will be 42% lower than last year, equivalent to one-fifth of the cost of the cheapest fossil fuel electricity.
IRENA added: “The record figures from solar photovoltaic auctions conducted in Abu Dhabi and Dubai, Chile, Ethiopia, Mexico, Peru and Saudi Arabia confirm that only a price of $0.03/kWh is possible.”