One of the recent findings of Renewable Power Generation Costs 2019 conducted by the International Renewable Energy Agency (IRENA) has highlighted the advantage of declining solar and wind costs over coal generators. The study says that replacing 500 GW of old coal plant with new renewables would mark annual savings of $23 billion.
For the record, the cost of solar energy has fallen by 82 per cent and that of wind energy by 39 per cent over the last decade.
Francesco La Camera, the Director General of IRENA, has stated that the generation costs for solar PV and onshore wind have fallen between 3 per cent and 16 per cent per year since 2010. He has also stated that since 2012, fossil fuels have been outpaced by renewables for new power capacity additions.
According to the IRENA report, the decline in the cost of renewable energy generation has been registered due to the steady improvement in technologies driven by competitive supply chains, economies of scale, and growing developer experience. This is a direct contradiction to the conservative opinion that technology costs can only be reduced through R&D in laboratories.
Camera has further opinionated that renewables will serve as a great addition to the post-pandemic stimulus packages as they are clean, easily scalable, and cost-effective. He has also stated that the use of renewables will not only benefit consumers and investors but also stimulate job creation.
Sources cite that the last decade has witnessed an LCOE learning rate of 36 per cent for solar PV, 23 per cent for onshore wind and 10 per cent for offshore wind energy. The recent auctions and power purchase agreements project that the solar plants to be delivered in 2021 will be 43 per cent cheaper as compared to those delivered in 2019.
The report further states that the price falls are an indication of improved capacity factors and the construction of CSP plants in countries having better solar resources.