A new report by the International Renewable Energy Agency (IRENA) has revealed that, in 2020, 62% of total renewable power generated had lower costs than the cheapest new fossil fuel option.
Renewable Power Generation Costs in 2020 shows that costs for renewable technologies fell significantly year-on-year: onshore wind by 13%; offshore wind by 9%; and solar photovoltaic (PV) by 7%.
With these costs at low levels, renewable energy technologies undercut coal’s operational costs, the report found.
The report revealed that between 2010-2020 there was a dramatic improvement in the competitiveness of solar and wind technologies.
Within 10 years, the cost of electricity from solar PV fell by 85%; onshore wind by 56%; and 48% for offshore wind.
Globally, over 800GW of existing coal power costs more than new solar PV or onshore wind projects commissioned in 2021.
Retiring these plants would reduce power generation costs by up to USD 32.3bn annually and avoid around 3Gt of CO2 per year. This corresponds to 9% of global energy-related CO2 emissions in 2020 or 20% of the emissions reduction needed by 2030.
The outlook to 2022 sees global renewable power costs falling further, with onshore wind becoming 20-27% lower than the cheapest new coal-fired generation option.
“Today, renewables are the cheapest source of power,” said IRENA’s director general, Francesco La Camera.
“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.”
“Following the latest commitment by G7 to net-zero and stop global coal funding abroad, it is now for G20 and emerging economies to match these measures.
“We cannot allow having a dual-track for energy transition where some countries rapidly turn green and others remain trapped in the fossil-based system of the past.
“Global solidarity will be crucial, from technology diffusion to financial strategies and investment support. We must make sure everybody benefits from the energy transition.”