Renewable energy is currently towards being the cheapest source of energy, making it easier for countries still dependent on coal to make the transition in an economically attractive way.
The costs of producing electricity from renewable sources continue to fall, making these green technologies increasingly competitive in the electricity buying and selling markets. The report by IRENA – International Renewable Energy Agency, (International Renewable Energy Agency, in the original acronym), on Renewable Energy Generation Costs in 2020, released this week, concludes that.
The change has been steadily and improving year by year. Will it be enough to mitigate the effects of climate change? That is the question.
Effects of climate change have already been felt all around the world. Climate change is being felt in every continent. It is being felt by the poor which are affected by extreme weather. It is also affecting the rich with some of the most expensive homes, clothes, food, and travel trips that are affected, whether by storms, flooding, and fires.
Costs for renewable energy sources have been on falling for more than a decade now and this trend looks set to continue. And continues to increase the number of renewable energy options, depending on your surroundings. For example, the development of technologies like floating wind farms in oceans means that it has become cheaper to produce energy from these sources, resulting in renewables becoming cheaper than coal as an energy source for electricity generation.
Some data supporting this evidence
By 2020, electricity generation costs will decrease by 16 percent for concentrating solar power (CSP), 13 percent for onshore wind, nine percent for offshore wind, and seven percent for solar photovoltaic.
62% of renewable capacity installed during 2019 entailed lower production costs compared to the cheaper fossil fuel option. Existing coal-fired power plants are significantly less competitive against new renewable capacity.
The IRENA report also shows that new renewables beat existing coal plants in terms of operating costs. New renewable power plant projects going forward during 2020 could enable emerging economies to save up to $156 billion over their lifecycle.
Maintaining coal-fired power plants is more expensive than investing in new renewable capacity and, therefore, decommissioning these plants, as several European countries are doing, is a form of saving, not only in economic and financial terms but also in environmental terms.
In global terms, the 800 GW of installed capacity of coal-fired plants cost more than the new solar photovoltaic or onshore wind energy projects awarded in 2021. Closing these plants would save $32.3 billion annually and avoid around three gigatonnes of CO2 per year, corresponding to nine percent of global energy-related CO2 emissions in 2020 or 20 percent of the emissions reduction needed by 2030 for a 1.5°C climate change, as underlined in IRENA’s World Energy Transitions Outlook.
The report confirms the trend that low-cost renewables are the future of the electricity and energy system as they will enable electrification in end uses, notably in buildings and some modes of transport, further driving competitive indirect electrification through green hydrogen. Investing in renewables is responding to the growing energy demand while saving costs, creating jobs, and boosting economic growth and environmental protection.