IEA Can’t Keep up with Falling Clean Energy Prices

October 29, 2020

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.

3 Responses to “IEA Can’t Keep up with Falling Clean Energy Prices”

  1. redskylite Says:

    From The American Institute of Physics. . .

    OCTOBER 27, 2020
    JOURNAL OF RENEWABLE AND SUSTAINABLE ENERGY

    ———————————————————————————-

    “Photovoltaics Industry Can Help Meet Paris Agreement Targets”

    “Our planet is on the path of an average temperature increase of 4 degrees Celsius before the end of this century, with respect to the average Earth temperature before the industrial age, and the result will be catastrophic.”
    ….
    “The financial requirement to grow the production rate (capital expenditures to build new production lines) is decreasing at a rate of 18% per year, driven by productivity improvements and a combination of higher-throughput per tool, larger wafers, and improved cell efficiency.”

    https://publishing.aip.org/publications/latest-content/photovoltaics-industry-can-help-meet-paris-agreement-targets/

  2. rhymeswithgoalie Says:

    European costs of solar shouldn’t matter to the USofA!
    I learned from Fox News that Germany gets much more sun than the US.

    • doldrom Says:

      Yes. Europe is one of the most disadvantaged places for the amount of sunshine falling on you solar array. Places like the UAE have the best chance of realizing a record for the investment.

      They say nuclear getting cheaper.
      They also fail to see any step changes in the technology for solar.
      There will probably be several before 2040, as goes for battery chemistries.


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