Renewable energy to be price competitive with fossil fuels by 2020

The rapidly falling costs associated with renewable energy sources will continue in the same vein until renewable technologies will be consistently price competitive with fossil fuels by 2020, according to a new report.

The International Renewable Energy Agency (IRENA) report outlined that the cost of generating onshore wind energy has fallen by around a quarter since 2010, while solar photovoltaic (PV) electricity costs have dropped by a massive 73%.

The report went on to predict that solar power generation costs will halve within just two years, with the best onshore wind and solar projects set to deliver electricity for an equivalent of US$3 cents per kWh.

Current costs for energy sourced from traditional fossil fuels range from 5 to 17 cents per kWh, whereas IRENA’s report expects all current commercial forms of renewable energy to fetch costs between 3 to 10 cents per kWh by 2020.

“This new dynamic signals a significant shift in the energy paradigm,” said Adnan Z. Amin, IRENA’s director-general. “These cost declines across technologies are unprecedented and representative of the degree to which renewable energy is disrupting the global energy system.

“Turning to renewables for new power generation is not simply an environmentally conscious decision, it is now – overwhelmingly – a smart economic one.

“Governments around the world are recognising this potential and forging ahead with low-carbon economic agendas underpinned by renewables-based energy systems.

“We expect the transition to gather further momentum, supporting jobs, growth, improved health, national resilience and climate mitigation around the world in 2018 and beyond.”