energy technology

The falling cost of renewable energy

Can the world afford the transition to renewable energy? That’s been a nagging concern for years. The cost of renewable energy has consistently been used to delay action on climate change. There may have been an argument ten years ago, but anyone making the case today is not paying attention.

This graph is from the latest report out of the International Renewable Energy Agency, and it shows the falling costs of various kinds of clean power – exactly what you’d expect to see as the sector achieves new economies of scale.

The trend is indicated for each type of power, with the difference betwen average global prices in 2010 and 2019.

As you can see, solar has the most dramatic fall in price – an 82% decline in cost. To put that another way, if you invested a million dollars in solar power in 2010, it would have bought you 213 kilowatts of capacity. The same money invested today would pay for 1,005kw.

The important question is of course the price relative to fossil fuels. To make the transition, renewable energy has to replace fossil fuels, and for that it needs to be competitive on price. The graph helpfully has the price range of fossil fuels in a dark grey bar across the bottom.

From this we can see that in 2010, solar PV was always more expensive that fossil fuels, sometimes twice the price. Today almost all PV projects are cheaper. All onshore wind power is competitive with fossil fuels, and the best schemes are cheaper.

Concentrating solar power is still more expensive, but might not be for long if that trend line continues. Costs for geothermal and hydro buck the trend and are rising, but were already highly competitive against fossil fuels.

Yes, there are additional costs around renewable energy that aren’t captured here – such as the need for grid balancing and energy storage. But there are additional costs to fossil fuels too, the most important one being the destruction of a habitable planet.

10 comments

  1. Hi Jeremy, I’ve been getting clued up on green hydrogen and ammonia and noticed you might not have touched on it much to date. A friend of mine sent me some good videos to check out on these forms of energy you might like to check out: This is a fabulous lecture given in the US with a comprehensive look at a systems approach to getting California and the US to renewables by 2050 – including transport – https://vimeo.com/301111544 it is renegade idea as a need to shift from power grids and electricity towers to underground hydrogen but the number are there and feasibility… Well worth the watch and learn 🙂 Another is a shorter video and looking at how Australia could easily transition to green hydrogen and make an industry of it – https://www.youtube.com/watch?v=EkuVE0SA1B8 it also give a good overview of the pros and cons of green hydrogen… The final link is more about green ammonia and with a UK focus – https://www.youtube.com/watch?v=qEut7o-b5hY  Thought you would be interested in these approaches to renewable energy and it seems like a big bold but beautiful move to making something that is really looking at systems thinking and second-order change… Many Thanks

    d’Arcy.

    1. Funny you should mention it, because I’m planning a series on hydrogen at the moment and have been saving up ideas for that. I’ll have a look at these and see if there’s anything I can add to it. Thanks!

  2. Jeremy what about a series on the Green growth vs Green Degrowth argument? I think there there is little doubt about this trend but the Degrowers will say it wont be enough.

  3. How can the world not afford to transition to renewable energy. I’ve been capturing solar power in numerous manners since the early 80’s.The last in an almost complete fully insulated 2 story solar greenhouse. Wow… does it ever store the heat well and our small potted seedlings have gone crazy there in spite of a month of rainy cool weather on the west coast of Vancouver Island. Our solar hot water tank is 37 years old and still works like new…. im so glad finally the world is seriously embracing solar power and other forms of safe renewable energy. Cheers to you Jeremy for your tireless reporting, practical promotion and advocating for a better world for all.

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