Report finds that the majority of new wind and solar projects will be cheaper than coal

Eliza Sandler - US East Coast

Eliza Sandler - US East Coast

According to a report from the International Renewable Energy Agency (IRENA), close to two-thirds of wind and solar projects built globally last year will be able to generate cheaper electricity than even the world’s cheapest new coal plants.

Solar power costs fell by 16& last year, while the cost of onshore wind dropped 13% and offshore wind by 9%. Furthermore, in the last ten years, the cost of large-scale solar power has fallen by more than 85% while onshore wind has fallen almost 56% and offshore wind has declined by almost 48%. 

Due to the falling cost of new wind farms and solar panels, 62% of new renewable energy efforts could underbid the cost of up to 800 gigawatts worth of coal plants or enough energy to supply UK electricity needs – 10 times over.

Francesco La Camera, IRENA’s director, explained: “Today renewables are the cheapest source of power. Renewables present countries tied to coal with an economically attractive phase-out agenda that ensures they meet growing energy demand while saving costs, adding jobs, boosting growth, and meeting climate ambition.”

In Europe, for example, the cost of a new coal plant would be well above the cost of new wind and solar farms, including mandatory carbon prices. In the US,  renewable energy could undercut between three-quarters and 91% of existing coal-fired power plants, while in India renewable energy would be cheaper than between 87% and 91% of new coal plants.

Replacing existing coal plants with unsubsidized renewable energy sources could save $32.3bn in energy system costs and avoid 3 gigatons of CO2 emissions, annually. Over the next two years, three-quarters of all new solar power projects will be cheaper than new coal power plants, and onshore wind costs will be a quarter lower than the cheapest new coal-fired option.

The IRENA report predicts the cost of renewable energy will continue to fall ini the coming years. “The trend confirms that low-cost renewables are not only the backbone of the electricity system but that they will also enable electrification in end uses like transport, buildings, and industry and unlock competitive indirect electrification with renewable hydrogen,” the report said.

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