Page 11 - AsiaElec Week 30

AsiaElec RENEWABLES AsiaElec
Report: India, Australia lead Asia- Pacific region on solar costs
ASIA-PACIFIC
INDIA has been found to have the lowest renew- able energy costs in the Asia-Pacific region, according to new research from energy consul- tancy Wood Mackenzie.
e ndings said India’s levelised cost of elec- tricity (LCOE) using solar photovoltaic (PV) energy had fallen to $38 per megawatt hour (MWh) this year. is makes it 14% cheaper than coal- red power, which has traditionally been the cheapest source of electricity generation.
LCOE includes upfront capital and develop- ment costs, the cost of equity and debt nance and operating and maintenance fees, as well as the cost of generating an MWh of electricity.
“India is the second largest power market in Asia-Paci c with installed power capacity of 421 GW,” a Wood Mackenzie research director, Alex Whitworth, said. “Solar capacity is expected to reach 38 GW this year. High-quality solar resources, market scale and competition have pushed solar costs down to half the level seen in many other Asia-Paci c countries.”
India has set itself a target of 100 GW of solar capacity by 2022. It is not expected to achieve this goal, given that it is only about a third of the way there, but its solar capacity is steadily rising. e solar target is part of a broader goal for India of having 175 GW of renewable-based installed power capacity by 2022.
Australia was second behind India in terms of solar costs. Solar LCOE in the country has contracted by 42% in the past three years, Wood Mackenzie said. While it is already compet- itive against gas-fired power generation, it is
anticipated to beat coal- red power next year. e consultancy forecast that solar LCOE would reach $48 per MWh in 2020, putting it ahead of all fossil fuel- red power generation.
is comes as growing LNG exports push gas prices higher in Australia, where coal is increas- ingly restricted by environmental regulations. Australia has historically relied on its plentiful reserves of cheap natural gas and coal for power generation, but is now having to look beyond these resources.
“Maintaining grid stability and reducing cur- tailment of intermittent generation have been a recurring challenge in Australia,” Whitworth said. “Energy storage is one of the key options available to help balance power demand and keep uninterrupted supply.”
Wood Mackenzie cautioned, however, that despite solar costs falling across the Asia-Paci c region, the average LCOE for both wind and solar still remained 29% higher than coal- red power. But the consultancy has forecast that as renewables become more competitive, this pre- mium will disappear by 2027. It anticipates that by 2030, renewable power will have a discount of around 17% on average to coal- red power across Asia-Paci c, with Malaysia, Indonesia and Japan the only countries that still have a higher renewable LCOE compared with coal.
Globally, Wood Mackenzie has projected that the falling cost of renewable power will boost wind and solar generation’s share of the power mix from 6% currently to a much higher level in the coming years.™
This comes as growing LNG exports push gas prices higher in Australia, where coal is increasingly restricted by environmental regulations.
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