Page 4 - AsiaElec Week 25 2021

AsiaElec COMMENTARY AsiaElec

Most green energy beats

coal on price in 2020

162 GW, or 62%, of new renewable capacity was cheaper than new
fossil fuel-fired generation in 2020, writes Richard Lockhart

GLOBAL TWO thirds of new renewable capacity proved boosting growth and meeting climate ambition.
to be cheaper than new fossil fuel-fired power I am encouraged that more and more countries
WHAT: generation in 2020, with 162 GW, or 62% of the opt to power their economies with renewables
Falling renewables costs total, of new green capacity undercutting coal or and follow IRENA’s pathway to reach net-zero
mean that up to 800 GW gas. emissions by 2050.”
of coal capacity could be New figures from the International Renew- The renewable projects added in 2020 will
replaced by renewables, able Energy Association (IRENA) found that reduce costs in the electricity sector by at least
saving $32bn per year just 2020’s new renewable additions would save $6bn per year in emerging countries, relative
and reducing CO2 emerging economies up to $156bn over their to adding the same amount of fossil fuel-fired
emission by up to 3bn lifespan. generation.
tonnes per year. That 62% share, which was cheaper than the Two-thirds of these savings will come from
most competitive fossil fuel option, was double onshore wind, followed by hydropower and solar
WHY: the percentage posted for 2019. PV.
Falling auction prices IRENA’s report, called Renewable Power Cost savings come in addition to economic
for solar and wind are Generation Costs in 2020, detailed that costs for benefits and reduced carbon emissions.
indicative of falling renewable technologies continued to fall signifi- The 534 GW of renewable capacity added
costs for renewables, cantly year on year. in emerging countries since 2010 at a lower
making existing coal Concentrating solar power (CSP) fell by 16%, cost than the cheapest coal option are reducing
uncompetitive across the onshore wind by 13%, offshore wind by 9% and electricity costs by around $32bn every year, the
globe solar PV by 7%. report found.
With costs at low levels, renewables increas- “We are far beyond the tipping point of coal,”
WHAT NEXT: ingly undercut existing coal’s operational costs La Camera continued. “Following the latest com-
In 2022, the price of too, the report said. mitment by G7 to net zero and stop global coal
onshore wind could be Low-cost renewables give developed and funding abroad, it is now for G20 and emerging
20-27% lower than the developing countries a strong business case to economies to match these measures. We cannot
cheapest new coal-fired power past coal in pursuit of a net-zero economy. allow having a dual track for energy transition
generation The report urged more G20 and emerging where some countries rapidly turn green and
economies to follow the example of G7 govern- others remain trapped in the fossil-based system
ments by stopping coal funding. of the past. Global solidarity will be crucial, from
Phasing out coal is a key element of moves technology diffusion to financial strategies and
towards net zero that many major governments investment support. We must make sure every-
have signed up to. body benefits from the energy transition.”
The US, the UK, Japan, Germany have
already set a date of 2050, while China has com- Costs
mitted itself to 2060. The report found that between 2010 and 2020,
Meeting the Paris Agreement goals of lim- CSP, offshore wind and solar PV all joined
iting temperature rises to 1.5 degrees, and two onshore wind in matching or undercutting the
degrees by 2100, would require an immediate price of fossil fuel generation.
end to coal investment, and an end to new oil In the 10 years, the cost of electricity gener-
and gas exploration, the IEA said last month. ated by utility-scale solar PV fell by 85%, that of
CSP by 68%, onshore wind by 56% and 48% for
Beyond the tipping point offshore wind.
“Today, renewables are the cheapest source of The report also found that solar PV and
power,” said IRENA Director-General Francesco onshore no longer needed subsidies to under-
La Camera. cut cheap coal, as auction prices fell in 2020 to
“Renewables present countries tied to coal $0.011-0.03 per kWh
with an economically attractive phase-out Moving on to operating costs, the report
agenda that ensures they meet growing energy warned coal power was no longer a good invest-
demand, while saving costs, adding jobs, ment, becoming in many cases an uneconomic

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