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Plunging cost of wind and solar marks turning point in energy transition - IRENA

Published 02/06/2020, 06:02
Updated 02/06/2020, 08:35
© Reuters. FILE PHOTO: An aerial view shows power-generating windmill turbines in a wind farm in Graincourt-les-Havrincourt

By Matthew Green

LONDON (Reuters) - Plunging costs of renewables mark a turning point in a global transition to low-carbon energy, with new solar or wind farms increasingly cheaper to build than running existing coal plants, according to a report published on Tuesday.

The International Renewable Energy Agency (IRENA) said the attractive prices of renewables relative to fossil fuel power generation could help governments embrace green economic recoveries from the shock of the coronavirus pandemic.

"We have reached an important turning point in the energy transition," Francesco La Camera, director-general of IRENA, said in a statement.

Although scientists say the world needs to stage a much faster transition to mitigate the worst impacts of climate change, the annual report by the Abu Dhabi-based agency shows that wind and solar are increasingly competitive on price alone.

More than half of the renewable capacity added in 2019 achieved lower power costs than the cheapest new coal plants, the report found.

Auction results also suggest that the average cost of building new solar photovoltaic (PV) and onshore wind power now costs less than keeping many existing coal plants running, reinforcing the case for phasing out coal, the report said.

The authors also calculated that the world could save up to $23 billion of power system costs per year by using onshore wind and solar PV to replace the most expensive 500 gigawatts of coal-fired power, mostly found in China, India, Ukraine, Poland, South Korea, Japan, Germany and the United States.

Such a switch would also reduce global carbon dioxide emissions by about the equivalent of 5% of the total CO2 emissions in 2019, the report found.

© Reuters. FILE PHOTO: An aerial view shows power-generating windmill turbines in a wind farm in Graincourt-les-Havrincourt

Next year, up to 1,200 GW of existing coal capacity could prove more expensive to operate than the cost of building new utility-scale solar PV farms, the report found.

Latest comments

If a wind turbine of 2MW has a capacity factor of 35%, it is equivalent to a hydrocarbon plant of 0.7MW. If it cost $2m/rated MW, it really costs $4m/0.7MW, or $5.7m/MW, which is very expensive still. However, unlike a fossil fuel plant, it cannot be turned on when it is wanted, but only when the wind blows. Since most of the wind power plants produce at the same time, the power is not worth as much, and has to be stored at more cost.Renewable is getting cheaper because it is too expensive to be useful.
I disagree on this because your running costs are very inflated per 2MW turbine and is certainly not realistic. The running costs of a oil and gas power station are way higher per annum. Battery tech is advancing to the point that any energy harvested through solar and wind can be stored and used at peak demands. Industru today has advanced where most factories are classed as constant power and run 24/7 therefore energy harvested through renewables can certainly be directed at such deman points. The demise of oil has started and we'll probably see it drop to a point in the future where it only costs what it used to cost in the early 1900s
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