Climate Denial Crock of the Week

Institute for Energy Economics and Financial Analysis:

The IEA halved the cost of solar power in Europe, in a single year, in its annual World Energy Outlook, published this month, showing just how far it is trailing the market and how fast solar costs are plunging.

Moreover, it shows both onshore wind & solar PV were cheaper in 2019 than the IEA had projected a year ago for 2040. In other words, renewables costs reductions are now already beating previous forecasts for 2040… an outrageous 21 years ahead of expectations! That speaks for itself…

This is the first time the IEA are acknowledging that solar and wind are the cheapest form of power generation in Europe. While much commentary around the hefty report has focused on the perceived impact of the Covid-19 pandemic on energy demand, and in particular the timing of ‘peak oil’, the fact that the IEA has drastically slashed its renewables cost assumptions in just one year seems to have slipped under the radar.

Many in the European energy industry have known for a few years now that renewables are least-cost, and as a result may have been disregarding IEA data in favour of more progressive sources. In any case, it’s worth highlighting the extent of the IEA’s recent revision which hints at the momentous change of direction that is underway across our energy system.

While this latest outlook shows that the transition is finally being acknowledged – for the first time the IEA have outlined a ‘net-zero by 2050’ case – we can already see from their Stated Policies Scenario (SPS) that it remains behind the curve. Perhaps this is understandable given the ongoing pace of change, including ever-cheaper batteries driven by the growing EV market and the mobilisation of multi-lateral efforts towards a future ‘green hydrogen’ economy.