Renewable Power Generation Costs - 2017

Renewable Energy (Other Energy Resources) / Resource Evaluation

International Renewable Energy Agency (IRENA) produced this 166-page report in 2017. It covers costs associated with solar, wind, hydroelectric, bioenergy, and geothermal, all for power generation:

RENEWABLE POWER GENERATION COSTS KEY FINDINGS:

• After years of steady cost decline for solar and wind technologies, renewable power is becoming an increasingly competitive way to meet new generation needs.

• For projects commissioned in 2017, electricity costs from renewable power generation have continued to fall.

• Bioenergy-for-power, hydropower, geothermal and onshore wind projects commissioned in 2017 largely fell within the range of generation costs for fossil-based electricity.

Some projects undercut fossil fuels, data collected by the International Renewable Energy Agency (IRENA) shows:

• The global weighted average cost of electricity was USD 0.05 per kilowatt-hour (kWh) from new hydropower projects in 2017. It was USD 0.06/kWh for onshore wind and 0.07/kWh for bioenergy and geothermal projects.

• The fall in electricity costs from utility-scale solar photovoltaic (PV) projects since 2010 has been remarkable. The global weighted average levelized cost of electricity (LCOE) of utility-scale solar PV has fallen 73% since 2010, to USD 0.10/kWh for new projects commissioned in 2017.

• Three key cost reduction drivers are becoming increasingly important:

1. technology improvements;
2. competitive procurement;
3. a large base of experienced, internationally active project developers.

• Continuous technological innovation remains a constant in the renewable power generation market. With today’s low equipment costs, however, innovations that unlock efficiencies in manufacturing, reduce installed costs or improve performance for power-generation equipment will take on increasing significance.

• These trends are part of a broader shift across the power generation sector to low-cost renewables. As competitive procurement drives costs lower, a wide range of project developers are positioning themselves for growth.

• The results of recent renewable power auctions – for projects to be commissioned in the coming years – confirm that cost reductions are set to continue through 2020 and beyond. Auctions provide valuable price signals about future electricity cost trends.

• Record low auction prices for solar PV in Dubai, Mexico, Peru, Chile, Abu Dhabi and Saudi Arabia in 2016 and 2017 confirm that the LCOE can be
reduced to USD 0.03/kWh from 2018 onward, given the right conditions.

• Onshore wind is one of the most competitive sources of new generation capacity. Recent auctions in Brazil, Canada, Germany, India, Mexico and Morocco have resulted in onshore wind power LCOEs as low as USD 0.03/kWh.

• The lowest auction prices for renewable power reflect a nearly constant set of key competitiveness factors. These include: a favorable regulatory and institutional framework; low offtake and country risks; a strong, local civil engineering base; favorable taxation regimes; low project development costs; and excellent resources.

• Electricity from renewables will soon be consistently cheaper than from most fossil fuels. By 2020, all the renewable power generation technologies that are now in commercial use are expected to fall within the fossil fuel-fired cost range, with most at the lower end or undercutting fossil fuels.

• The outlook for solar and wind electricity costs to 2020 presages the lowest costs yet seen for these modular technologies, which can be deployed around the world. Based on the latest  auction and project-level cost data, global average costs could decline to about USD 0.05/kWh for onshore wind and USD 0.06/kWh for solar PV.

• Auction results suggest that concentrating solar power (CSP) and offshore wind will provide electricity for between USD 0.06 and USD 0.10/kWh by 2020.

• Falling renewable power costs signal a real paradigm shift in the competitiveness of different power generation options. This includes cheaper electricity from renewables as a whole, as well as the very low costs now being attained from the best solar PV and onshore wind projects.

• Sharp cost reductions – both recent and anticipated – represent remarkable deflation rates for various solar and wind options. Learning rates for the 2010-2020 period, based on project and auction data, are estimated at 14% for offshore wind, 21% for onshore wind, 30% for CSP and 35% for solar PV.

• Reductions in total installed costs are driving the fall in LCOE for solar and wind power technologies to varying extents. This has been most notable for solar PV, CSP and onshore wind.

[Note no reference to nuclear power .... and no mention of inherent failings of renewables (i.e., wind and solar) and rising O&M costs, and need for back-up grid-power supplies]