The primary reason why governments turn to renewable energy and away from fossil fuels is the much needed environmental benefits.
The Paris Climate Agreement, which set out a global action plan to put the world on track to avoid dangerous climate change by limiting global warming to well below 2°C, now has 195 signatories. Part of the plan is to encourage countries to pursue cleaner energy sources and develop technology.
Now, a recent report suggests that not only is renewables a greener choice, it is also an economical one.
The International Renewable Energy Agency (IREA), a Masdar-headquartered intergovernmental agency promoting the widespread adoption and sustainable use of all forms of renewable energy, released a report saying that by 2020, “all the renewable power generation technologies that are now in commercial use are expected to fall within the fossil fuel-fired cost range.”
It said that most of the technologies will either be at the lower end of the cost range or actually weakening fossil fuels.
“This new dynamic signals a significant shift in the energy paradigm,” said Adnan Amin, director-general of IREA.
“Turning to renewables for new power generation is not simply an environmentally conscious decision, it is now – overwhelmingly – a smart economic one.”
Primary driver of this prediction is the growing investments in green infrastructure. The report focused at the relative cost of new energy projects being commissioned.
IREA said that by 2020, renewables will cost between 2p and 7p, in contrast to the current cost for fossil fuel power generation ranging from 4p to 12p per kilowatt hour in G20 countries.
It also mentioned about onshore and solar photovoltaic projects leading the way, expected to deliver electricity by 2p or less next year. Meanwhile, offshore wind farms and solar thermal are energy sources which need to catch up.
“These cost declines across technologies are unprecedented and representative of the degree to which renewable energy is disrupting the global energy system,” said Mr Amin.
Jonathan Marshall, energy analyst at the Energy and Climate Intelligence Unit (ECIU) shared to The Independent about the impact of cheap installation to consumers.
“If the stuff you’re building to generate electricity costs less, the end effect of that is having to pay less for the electricity that comes from it,” he said.
Moreover, a big factor of the 2020 prediction by IREA is based on the auction trends of renewable energy projects.
Source: The Independent