Renewable energies are being developed more every day and their production increases, therefore, having a more advanced and sophisticated technology, their production costs decrease. The decline in solar energy prices and their increase in energy efficiency make them increasingly competitive in world energy markets.
Since 2010, onshore wind power generation costs have decreased by around 25%. Solar energy prices have done so by 73%. When will renewables be fully competitive?
Cost reduction
According to a new analysis of the International Renewable Energy Agency (IRENA), renewables are developing at an accelerated rate and will be able to be fully competitive by 2020.
The report highlights the decrease in costs in photovoltaic solar energy, so far the most powerful, cheap and competitive renewable energy, which will be reduced by half by 2020. Projects with photovoltaic solar energy or onshore wind could generate electricity at 3 cents for each kWh, when right now they are generating it at 6 and 10.
Recent results in energy auctions suggest that the production costs of renewables will decrease as fossil fuel prices become more expensive and renewable technologies advance.
The report also notes that wind power is now contracted usually 4 cents per kWh. Lhe energy generated by fossil fuels is increasing so much that the price is already between 5 and 17 cents per kWh.
“This new dynamic signals a significant shift in the energy paradigm. These cost reductions in all technologies are unprecedented and are representative of the degree to which renewable energy is revolutionizing the global energy system. " Says Adnan Z. Amin, CEO of IRENA.
Report on renewables
Launched on the first day of the VIII IRENA Assembly in Abu Dhabi, United Arab Emirates, the report 'Renewable electricity generation costs in 2017' points out that there are a multitude of renewable energy sources, such as geothermal energy, bioenergy or hydroelectric power that have competed in the last 12 months against the costs of generating electricity from fossil fuels.
Not only solar or wind energy are the main renewable sources. They are the most widely used energy sources, since there are wind and sun in almost all areas (if not all) of the planet. However, not all countries have points where geothermal activity is greater, so much biomass is generated or there are infrastructures such as leap reservoirs for the generation of hydroelectric energy.
With these improvements in the prices of renewables, it is expected that by 2019 there will be better projects powered by wind and solar parks and that will produce energy for only 3 cents per kWh. This is a cost well below the price of fossil fuels.
The costs of renewables are falling so much given the technological advances achieved, the processes of acquisition and commitment to clean technologies, the operation of experiments that develop medium and large processes that are capable of competing in the global market, etc.
The decision to opt for renewable energy to meet energy demand is no longer just a matter of reducing pollution, respecting the environment or fighting climate change, rather, it is a smart decision when it comes to economics.
“Governments around the world are recognizing this potential and are moving steadily toward low-carbon economic agendas supported by renewable-based energy systems. We expect the transition to gain more momentum, supporting job creation, economic growth, improved health, national resilience and climate change mitigation around the world in 2018 and beyond. ” The director of IRENA clearly states.
Every day renewables are becoming more and more in the markets and will soon be the main energy sources on the planet.