New renewable energy projects will be more cost-effective than coal: new report

Solar power costs have fallen by more than 84 per cent between 2010-202, during that same time period onshore wind costs fell by 56 per cent and 48 per cent for offshore wind

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Nearly two-thirds of all wind and solar projects built globally last year could generate cheaper electricity than even the least expensive coal alternatives, according to a report from the International Renewable Energy Agency (IRENA).

Because of downward costs associated with wind farms and solar panels, the report states that 62 per cent of renewable energy projects could be more cost-effective than coal equivalents of up to 800 gigawatts, approximately enough to meet the U.K.’s electricity demand 10 times over.

“Today renewables are the cheapest source of power,” said Francesco La Camera the director-general of IRENA in a press release, “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.”

IRENA’s cost analysis program has been collecting performance data of renewable energy technologies since 2012and simultaneously reporting on the costs of those technologies. Two key data sources were used to create the report, including the IRENA Renewable Cost Database and the IRENA Auctions and Power Purchase Agreement databases. The report analyzed approximately 20,000 renewable energy projects around the world and also data from 13,000 auctions and renewable power purchase agreements.

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Last year solar prices fell by 16 per cent, according to the report, while the cost of onshore wind fell by 13 per cent and offshore wind by nine per cent during the same time period.

In comparison, the price of a new coal plant in Europe would well exceed the cost of a wind or solar farm when mandatory carbon prices are included, according to the Guardian. In the U.S. renewable forms of energy could be between 75 and 91 per cent cheaper in comparison to existing coal-fired power plants and in India renewable energy sources would be 87 and 91 per cent cheaper than new coal plants.

Replacing active coal plants with unsubsidized renewable energy could also save $32.3 billion (39.74 billion CAD) annually in energy system costs, while reducing carbon dioxide emissions by three gigatonnes, according to the report.

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Carbon savings from phasing out 800GW of coal power, the report said, would have the equivalent of cutting the world’s energy-related emissions by nine per cent last year, or around 20 per cent of carbon savings required by 2030 to mitigate global heating by 1.5C over pre-industrial temperatures.

La Camera said the agency’s latest report provides evidence that the world is “far beyond the tipping point of coal,” partly because costs associated with solar power have fallen by more than 85 per cent between 2010-20, while onshore wind costs have fallen by 56 per cent and offshore wind by 48 per cent in that same time.

IRENA’s most recent report also predicts the trend of falling renewable energy prices to continue in the coming years. In the next two years alone, the report projects three-quarters of all novel solar power initiatives to be cheaper than their coal counterparts, while onshore wind costs will fall to be 20-27 per cent cheaper than the cheapest coal option.

“The trend confirms that low-cost renewables are not only the backbone of the electricity system, but that they will also enable electrification in end uses like transport, buildings and industry and unlock competitive indirect electrification with renewable hydrogen,” said the report.

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New renewable energy projects will be more cost-effective than coal: new report