The cost of renewable energy generation becomes cheaper than fossil fuels power

The cost of renewable energy generation becomes cheaper than fossil fuels power

Every day, the world produces carbon dioxide that is released to the earth’s atmosphere and which will still be there in one hundred years time. This increased content of Carbon Dioxide increases the warmth of our planet and is the main cause of the so called “Global Warming Effect”. One answer to global warming is to replace and retrofit current technologies with alternatives that have comparable or better performance, but do not emit carbon dioxide.

By 2050, one-third of the world's energy will need to come from solar, wind, and other renewable resources as per estimate. Climate change, population growth, and fossil fuel depletion mean that renewables will need to play a bigger role in the future than they do today.

Alternative energy refers to energy sources that have no undesired consequences such for example fossil fuels or nuclear energy. Alternative energy sources are renewable and are thought to be "free" energy sources. They all have lower carbon emissions, compared to conventional energy sources. These include Biomass Energy, Wind Energy, Solar Energy, Geothermal Energy, Hydroelectric Energy sources. Combined with the use of recycling, the use of clean alternative energies such as the home use of solar power systems will help ensure man's survival into the 21st century and beyond.

The biggest hurdle till now was the implementation cost of renewable energy as compared to conventional fossil fuels powered energy. If we go with the IRENA report submitted today, the cost of renewable energy generation is reducing. The cost of generating power from renewable energy sources has reached parity and even dropped below the cost of fossil fuels for many technologies in many parts of the world, the International Renewable Energy Agency (IRENA) revealed in a new report. The landmark report, Renewable Power Generation Costs in 2014, concludes that biomass, hydropower, geothermal and onshore wind are all competitive with or cheaper than coal, oil and gas-fired power stations, even without financial support and despite falling oil prices.

Solar photovoltaic (PV) is leading the cost decline, with solar PV module costs falling 75 per cent since the end of 2009 and the cost of electricity from utility-scale solar PV falling 50 per cent since 2010. “Renewable energy projects across the globe are now matching or outperforming fossil fuels, particularly when accounting for externalities like local pollution, environmental damage and ill health,” said Adnan Z. Amin, Director-General of IRENA. “The game has changed; the plummeting price of renewable is creating a historic opportunity to build a clean, sustainable energy system and avert catastrophic climate change in an affordable way.” Other highlights of report include:

The average cost of wind energy ranges from USD 0.06/kWh in China and Asia to USD 0.09/kWh in Africa. North America also has competitive wind projects, with an average cost of USD 0.07/kWh. Solar PV module prices have dropped 75% since 2009 and continue to decrease. Residential solar PV systems are now as much as 70% cheaper than in 2008.

Between 2010 and 2014 the total installed costs of utility-scale solar PV systems fell by as much as 65 per cent. The most competitive utility-scale solar PV projects are delivering electricity for USD 0.08/kWh without financial support, and lower prices are possible with low financing costs. Their cost range in China, North America and South America has fallen within the range of fossil fuel-fired electricity.

Solar power prices are dropping rapidly in the Middle East, with a recent tender in Dubai, UAE, falling to 0.06USD/kWh.

Renewables are competitive, even when integrating high shares of variable renewables into the electricity. When damage to human health from fossil fuels in power generation is considered in economic terms, along with the cost of CO2 emissions, the price of fossil fuel-fired power generation rises to between USS 0.07 and 0.19/kWh.

For 1.3 billion people worldwide without electricity, renewables are the cheapest source of energy. Renewables also offer massive gains in cost and security for islands and other isolated areas reliant on diesel.

The report goes on to explain that renewable energy price improvements are not universal, and that costs range widely according to resources and the availability of financing. Offshore wind and concentrated solar power (CSP) technologies are in earlier stages and deployment costs remain higher than those of fossil fuels. These technologies will however become more cost-competitive in future, especially where low-cost financing is available.


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