Concentrating solar power, in which mirrors focus light over a large area into a central generator, has seen costs drop to as little as USD 0.14/kWh.
Renewable energy has become the most cost-effective way to generate electric power for hundreds of millions of people worldwide who are not on the grid, a new IRENA policy brief reveals.
Renewable energy has also become the least-cost option for extending grid supply in areas with suitable resources, such as sun and wind.
The findings serve as a wake-up call to policy-makers on the declining cost of renewables.
“A renewable revolution is underway,” says Dolf Gielen, IRENA’s Innovation Director. “Recent years have seen consistent, sometimes dramatic, falls in the cost of electricity from renewables – making it the cheapest option off-grid, and even on-grid in places with plentiful resources.”
“The message is clear: renewable energy today is often the cheapest option to meet rising demand for electricity – even without subsidies. It is also healthier, and better for the environment. A renewable energy future is now bankable, and there are further cost reductions to come.”
Highlights of the IRENA publication, “Renewable Power Generation Costs” include: – Biomass power generation has become competitive wherever low-cost agricultural or forestry waste is available, with the most competitive projects producing electricity for as little as USD 0.06/kWh.
– Concentrating solar power, in which mirrors focus light over a large area into a central generator, has seen costs drop to as little as USD 0.14/kWh.
The two main CSP systems are parabolic trough and solar towers. The majority of commercial experience has so far come from parabolic trough systems. The two technologies currently have similar LCOEs (USD 0.20 to USD 0.36/kWh for parabolic troughs and USD 0.17 to USD 0.29/kWh for solar towers) assuming the cost of capital is 10%.
However, the LCOE of CSP in areas with excellent solar resources could be even lower and may be in the range USD 0.14 toUSD 0.18/kWh.
Solar towers appear to have a greater potential for cost reductions and their lower costs for thermal energy storage will make them very attractive solutions to provide flexible electricity generation and help facilitate the penetration of wind and solar PV.
Parabolic trough plants without thermal energy storage have capital costs as low as USD 4 600/kW, although they have low capacity factors of between 20% and 25%. Adding six hours of thermal energy storage doubles capacity factors, but increases capital costs to between USD 7 100 to USD 9 800/kW.
Solar tower plants with between sixand 15 hours of energy storage can achieve capacity factors of 40% to as high as 80% and cost between USD 6 300 and USD 10 500/kW when energy storage is included. Storage reduces the LCOE for CSP plants and is a particularly attractive option for power systems where evening demand is high.
Increased support for CSP would help accelerate deployment and contribute to reducing costs through economies of scale and learning-by-doing.
– Hydropower, currently the world’s largest source of renewable energy, today often provides the lowest cost electricity of any generation source.
– Solar photovoltaics (PV), which has seen rapid development over the past two years, is set to achieve grid parity with residential electricity tariffs in many locations around the world. PV costs typically range from USD 0.16 to 0.36/kWh.
– The most competitive onshore wind power sites can deliver electricity costs at as little as USD 0.04/kwh.
By way of comparison, electricity generated from fossil fuel typically costs between 0.06 and 0.12/kWh in OECD countries – excluding the cost of transmission and distribution.