• Mon. Aug 2nd, 2021

A report concludes that renewable energy and traditional power are cost-competitive


Jan 4, 2021

As per a joint 2020 study by the International Energy Agency (IEA, Paris, France) as well as the Nuclear Energy Agency (NEA, Paris), the leveling of electricity production costs for “low-carbon” technologies such as wind as well as nuclear power are gradually declining, rendering these innovations cost-competitive with the production of fossil fuels. The study, which is the ninth in a string of cost-generating electricity reports to advise policy-makers as well as other decision-makers, is focused on the plant-level expenses projected to be posted by 243 plants in 24 nations in the year 2025, varying from coal as well as natural gas to wind and solar power to nuclear energy sources.

The study recognizes that prices differ by region and within nations. Wind and solar generated variable energy, as well as carbon emissions and the climate change policy legislation, would all impact the cost of producing electricity. Still, by their survey results, the monitoring agencies find that LCOE (Levelized costs of generating electricity) is predicted to be lesser for wind or nuclear power stations than for  or coal gas power plants in many of the countries covered.  

For instance, in the United States (that also contributed the largest number of participating facilities from one nation, at 64), the onshore wind, as well as solar power, are projected to be the least costly to run, followed by offshore wind, natural gas,  nuclear and coal, at a projected carbon cost of $30 for every tonne of Carbon dioxide. Utility-scale solar energy is listed as the lowest cost alternative in India and China, led by the solar and onshore wind. The study particularly notes that onshore wind is estimated to have the lowest leveled power prices in the year 2025 on average. Nuclear energy is still expected to continue to expand, and the study states would be critical to cost-effectively achieving global decarbonization targets. Offshore wind prices are still declining, but they are not quite at the onshore wind stage yet.

The impact of transportation as a component in global energy use as well as carbon emissions is also addressed in relation to electricity generation. The study cites dozens of reports on the price of electric vehicles (EV) as well as internal combustion engine vehicles, indicating that “presently, due to high expense of the batteries as well as charging infrastructures, the actual financial cost of electric cars appears evidently greater than that of conventional cars.” The cost of EVs and Internal Combustion Engine vehicles is projected to converge by the year 2030-2035, the report added, is supported by the reduction in the cost of batteries.