IRENA: Many renewable energy sources cheaper than fossil fuels

By Erin Voegele | January 20, 2015

The International Renewable Energy Agency has released a new report that determined many sources of renewable energy are now cheaper than fossil fuels.

According to information contained in IRENA’s “Renewable Power Generation Costs in 2014” report, 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.

“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 renewables is creating a historic opportunity to build a clean, sustainable energy system and avert catastrophic climate change in an affordable way.”

Within the report, IRENA indicates biomass can provide dispatchable baseload electricity at very competitive costs. The regional or country weighted levelized cost of electricity (LCOE) ranged from as low as 4 cents per kWh in India and 5 cents per KWh in China to 8.5 cents per kWh in Europe and North America over the past ten years.

According to the report, cumulative worldwide installed biomass capacity was around 86 MW at the end of 2013, and is expected to reach 130 GW by the end of 2025. Approximately one-third of the installed capacity is located in Europe, with 29 percent in the Asia Pacific region and almost 20 percent in North America.

IRENA said the potential for biomass cost reductions is highly heterogeneous due to the different stages of development of the various biomass technologies. While the cost reduction potentials for established technologies are relatively small, the long-term potential for cost reductions for less mature technologies remains good, taking into consideration the estimated future installation and the annual growth rate of cumulative installed capacity of 13 percent per year between 2000 and 2013.

A full copy of the report can be downloaded from the IRENA website.