Renewable Power Costs Continue to Plummet

December 3, 2012

International Renewable Energy Agency:

Renewable energy has become the most cost-effective way to generate electric power for hundreds of millions of people worldwide who are not on the grid, a new IRENA policy brief reveals. Renewable energy has also become the least-cost option for extending grid supply in areas with suitable resources, such as sun and wind.

The findings serve as a wake-up call to policy-makers on the declining cost of renewables.

“A renewable revolution is underway,” says Dolf Gielen, IRENA’s Innovation Director. “Recent years have seen consistent, sometimes dramatic, falls in the cost of electricity from renewables – making it the cheapest option off-grid, and even on-grid in places with plentiful resources.”

“The message is clear: renewable energy today is often the cheapest option to meet rising demand for electricity – even without subsidies. It is also healthier, and better for the environment. A renewable energy future is now bankable, and there are further cost reductions to come.”

Highlights of the IRENA publication, “ Renewable Power Generation Costs” include:

  • Biomass power generation has become competitive wherever low-cost agricultural or forestry waste is available, with the most competitive projects producing electricity for as little as USD 0.06/kWh.
  • Concentrating solar power, in which mirrors focus light over a large area into a central generator, has seen costs drop to as little as USD 0.14/kWh.
  • Hydropower, currently the world’s largest source of renewable energy, today often provides the lowest cost electricity of any generation source.
  • Solar photovoltaics (PV), which has seen rapid development over the past two years, is set to achieve grid parity with residential electricity tariffs in many locations around the world. PV costs typically range from USD 0.16 to 0.36/kWh.
  • The most competitive onshore wind power sites can deliver electricity costs at as little as USD 0.04/kWh. (note: the best great plains sites in the US are down to 0.03, with more savings expected – PS)

By way of comparison, electricity generated from fossil fuel typically costs between USD 0.06 and 0.12/kWh in OECD countries – excluding the cost of transmission and distribution.


7 Responses to “Renewable Power Costs Continue to Plummet”

  1. […] International Renewable Energy Agency: Renewable energy has become the most cost-effective way to generate electric power for hundreds of millions of people worldwide who are not on the grid, a new…  […]

  2. skeptictmac57 Says:

    Wind turbine manufacturers continue to improve performance,and reduce costs as well:

    “Scientists at GE Global Research, Virginia Tech, and the National Renewable Energy Laboratory have started working on a new blade design using fabric wrapped around a skeleton of metal ribs resembling a fishbone. GE estimates that that the new design could revolutionize the way wind blades are designed, made, and installed, cut blade costs by 25 to 40 percent.”

  3. William Burr Says:

    GOOD NEWS! I’m Tellin’ Everybody. The Facts are Clear. Sustainable Development of Alternative Energy is Viable, Reliable, and Affordable. Investments in AE yield more Jobs and better Profits. Climate Change Deniers don’t know the Facts, don’t Want to know’ and Don’t Want You to Know. They are Paid Liars for the Oil Oligarchy.
    Addressing the Climate Change Crisis won’t hurt the Economy, it will transform the Economy. AE Power will make us Energy Self Sufficient, without Poisoning the Ground Water by Fracking for Shale Gas. Cheap, Clean Power will drive further Economic Development to a Prosperous and Sustainable Future. Everybody wins in this Scenario. Let’s Get It Done! GreenmanPA.

  4. tonyloman Says:

    I agree with Burr. This is good news. I do not want to denigrate this post. It and the study referenced were informative and provide hope for the future. But, I am more sanguine about cost reduction because of a major difficulty–at least from the standpoint of the individual home owner. The initial investment required for solar and wind, for example, is still prohibitively high for most individual citizens, a point that Heinberg makes as part of his discussion of EROEI in his book The End of Growth. I had one small installation of solar panels installed in 2007 and decided that panel costs had fallen enough to have 10 panels installed (at another location) late last year (2011). The cost per panel was definitely lower than the earlier set but still prohibitively expensive, more than probably 95 percent of home owners could afford in the rural Missouri county where the house is located. The reason is that the cost of installation is still far, far too great. I will do good to recoup my investment in 20 years (under utility-friendly Missouri laws). Even people with generous hearts who are concerned about our future are given pause at the costs involved for solar and wind in this state. Interestingly, I believe that I can install a second set at less than half the original cost but only if I purchase the panels, do the subcontracting and some of the work myself. How many people are willing to do that? I know that there are better support and capitalization programs in some states and that there is work on out-of-the-box kits that are simpler to install, but in most locations in the U.S. this remains a serious obstacle to adoption of renewable energy sources by individuals.

    • skeptictmac57 Says:

      You raise some valid concerns Tony. Some of the ways around them depend on what’s available in your area.For instance,some companies are installing panels on homeowner’s roofs at no charge, in return for a fixed long term price for their electricity which is usually competitive.
      Also,in some area’s such as Texas,you can purchase 100% wind power from a provider at a competitive price (this is what I do).Those options are greener,and do not require any upfront investment from the homeowner,but of course they aren’t available everywhere yet,unfortunately.

    • This EROEI – it only looks at the cost of renewable equipment and installation costs, right? And then, compares them to conventional carbon-based sources, right?

      But the calculation never includes the true extra cost of conventional sources – the $1204 trillion dollars in adaptation and disruption (to say nothing of the cost of billions of human lives lost) costs by year 2100 due to CO2 emissions and the resulting AGW.

      That $1204 trillion dollar expense is going to be picked up by our government eventually one way or another, is it not?

      Is that not the most eloquent argument we can make that our government – if only to save money – should be shouldering the cost of renewable energy deployment, not individual home and business owners?

      The experts keep telling us that to avoid a 4C+ hotter world, we need to reduce our carbon emissions to zero within 5 to 10 years. How the hell are we going to do that if homeowners have to somehow pay the cost of renewables? Answer – we are not.

      Government, in seems to me, MUST get into the renewable energy provider business. Today. Not be providing tiny tax incentives. But by becoming our national renewable energy utility.

      Am I making any sense?

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