Renewable Production Costs Compete with Fossil Fuels

THE cost of producing electricity from renewable sources has been falling for several years. A new report from the International Energy Agency (IEA) reveals renewables are competing on cost of production.

The report provides in detail the contrasting costs for different power generation technologies around the world and shows that renewable sources can produce electricity at close to or even below the cost of new fossil fuel-based power stations.

The report, Projected Costs of Generating Electricity: 2015 Edition, also shows that new nuclear power plants generate electricity more cheaply than other established “baseload” sources such as coal- and gas-fired power plants over the full lifetime of facilities when financing costs are relatively low.

The report, a joint project by the IEA and the Nuclear Energy Agency, calculates the cost of producing electricity from different types of new power plants.

Compared with the previous edition published five years ago, Projected Costs of Generating Electricity: 2015 Edition details a significant drop in the price of solar and wind generation costs, especially for solar photovoltaic (PV) installations, as a result of sustained technological progress. That drop, as well as a plateauing in the price of new nuclear energy plants, helped arrest cost inflation in electricity generation over the past five years.

No single technology proves the cheapest form of electricity generation under all circumstances: many factors determine the final cost of any investment, principally local influences such as market structure, policy environment and resource endowments. 

While the costs of renewable technologies in some higher priced markets can be well above that of coal- or gas-fired plants, the report details how utility-scale solar PV and especially onshore wind power are comparable and often lower in countries featuring plentiful resources and appropriate market and regulatory frameworks.

To read the Executive Summary of Projected Costs of Generating Electricity: 2015 Edition, click here.

Friday 4th September 2015


Add New Comment:

Comments

To Comment you must be a member of The ESA, please login or register to join

There are currently no comments, be the first to comment above.