Most new renewable power generation is now cheaper even than the cheapest existing coal-fired power plants as costs continued to fall in 2020, the International Renewable Energy Agency (IRENA) said in a new report on Tuesday.
"Today, renewables are the cheapest source of power," IRENA's Director-General Francesco La Camera said in a statement, while the agency is urging countries "to power past coal."
The new renewable projects added last year alone could save emerging economies up to US$156 billion over their lifespan, IRENA says.
Last year, costs for solar, onshore wind, and offshore wind continued to drop, according to the agency's cost analysis.
Over the past twenty years, the world has seen the booming installation of renewable power generation capacity, thanks to falling costs, economies of scale, and advances in technology, IRENA said. Total global renewable power generation capacity nearly quadrupled to 2,977 gigawatts (GW) last year from 754 GW in 2000. Costs for electricity from utility-scale solar photovoltaics (PV) fell by 85 percent between 2010 and 2020, and by 7 percent from 2019 to 2020.
While IRENA touts declining costs over the past decade or two, the global push toward green energy and the race for net-zero commitments are pushing up demand for materials for low-carbon energy technologies, pressuring costs upward.
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Year-to-date, solar module prices, for example, have jumped by 18 percent amid a severe shortage of polysilicon, which serves as a feedstock for the production of today's solar cells. Polysilicon prices have surged to their highest in nearly a decade, according to data from PVInsights cited by Bloomberg.
New utility PV projects are becoming more expensive due to increasing costs for modules, shipping, and labor, Rystad Energy said in a report in April.
In wind power, Mads Nipper, CEO at the biggest developer of offshore wind farms in the world, Denmark-based Ørsted, told Reuters earlier this week he was concerned that the race of the biggest oil companies to enter offshore wind could lead to spikes in seabed acreage prices, which would undermine project competitiveness and the speed of technology development.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More