The costs of wind and solar energy will decline further in the coming years to the point of being cheaper overall than fossil fuels (fuel, gas, coal), but other green energies are also growing rapidly, according to a study published Saturday.
“All renewable technologies will be competitive with fossil fuels in 2020,” says the International Renewable Energy Agency (Irena) in a new study on green energy costs.
The average costs of renewables are expected to be between $30 and $ 100 per megawatt hour (MWh) depending on the technologies (wind, solar, geothermal, biomass, etc.), when fossil fuels will cost between $50 and $170 per MWh, according to the study.
The price nonetheless will vary by country, depending on energy fields or regulations.
Already last year, the average costs of new onshore wind farms and solar power projects fluctuated between $60 and $100 per MWh, with several records below that average.
This has been the case in the United Arab Emirates, Chile, Mexico and Peru in solar energy.
In wind energy, projects are already regularly commissioned at a cost of 40 dollars per MWh.
The cost reductions are driven by the constant improvement of technologies but also by the competition that is growing between many companies that develop renewable energy projects, the study notes.
“Turning to renewables (…) is no longer simply a decision made in the name of the environment but, more and more widely, an intelligent economic decision”, according to Adnan Z. Amin, Director-General of the Irena, quoted in the statement.
The “best” terrestrial and solar wind projects could produce electricity at a cost of $30 per MWh, or less in the next two years.
And this drop in costs is also observed for other renewable energies, notes Irena. Last year, projects in geothermal, biomass or hydroelectricity cost around $70 per MWh.
Concentration solar plants and offshore wind farms are also making progress and some projects that will be commissioned by 2020 and 2022 will cost between $60 and $100 per MWh, Irena forecast.
“This new dynamic signals a significant shift in the energy paradigm,” says Amin. “These cost declines across technologies are unprecendented and representative of the degree to which renewable energy is disrupting the global energy system, ” he added.