Around the world, more than half of renewable capacity additions in 2019 had lower electricity costs than their fossil fuel counterparts.
Renewables have seen their costs drop dramatically over the last decade according to a new report by the International Renewable Energy Agency (IRENA). Most noticeably, the cost of solar PV globally dropped by 82% and fell by 13% in 2019 alone.
Since 2010, the cost of concentrated solar power also dropped by 47%, while onshore wind costs fell 40% and offshore wind 29%.
As such, replacing the costliest 500GW coal plants with solar and wind power would result in an annual saving of £18.6 billion. Additionally, this would reduce global CO2 emissions by 5% based on figures from 2019.
By 2021, there will be up to 1,200GW of existing coal capacity that will cost more to operate than it would to install new solar PV capacity.
Francesco La Camera, the director-general of IRENA said the new figures show we have reached an important turning point for the energy transition.
“The case for new and much of the existing coal power generation, is both environmentally and economically unjustifiable.
“Renewable energy is increasingly the cheapest source of new electricity, offering tremendous potential to stimulate the global economy and get people back to work. Renewable investments are stable, cost-effective and attractive offering consistent and predictable returns while delivering benefits to the wider economy."
Given the cost profile of renewables and the desperate need to decarbonise, the report calls for renewable power installations to form a key component of economic stimulus packages following the COVID-19 pandemic.
“A global recovery strategy must be a green strategy,” La Camera added. “Renewables offer a way to align short-term policy action with medium- and long-term energy and climate goals. Renewables must be the backbone of national efforts to restart economies in the wake of the COVID-19 outbreak. With the right policies in place, falling renewable power costs, can shift markets and contribute greatly towards a green recovery.”
This call echoes many in the UK, including the Committee on Climate Change urging the government to put low carbon and climate-resilient infrastructure at the heart of the approach to rebuild the UK after COVID-19.
In the UK, the COVID-19 lockdown has given a glimpse of the future for the electricity network, with low demand meaning renewables have dominated the grid. This has led to a number of records being broken, and saw May become the least carbon intensive month ever.
The full report Renewable Power Generation Costs in 2019 can be found here.