Latest wind and solar cost falls mean the energy transition has reached a “turning point” that should prompt massive retirement of “unjustifiable” global coal capacity, claimed the International Renewable Energy Agency (Irena).
The global renewables body said 1,200GW of existing coal-fired generation could by next year cost more than new PV power. A new Irena report reckons replacing the most expensive 500GW with wind and solar would shave up to $23bn a year from annual power system costs and reduce emissions by 1.8 gigatons of CO2, equivalent to half 2019’s global total.
Irena director general Francesco La Camera claimed: “We have reached an important turning point in the energy transition. The case for new and much of the existing coal power generation, is both environmentally and economically unjustifiable.”
Irena’s latest pricing data flags a global average 9% year-on-year fall for both onshore and offshore wind in 2019 to $53/MWh and $115/MWh respectively, with utility-scale solar 13% lower at $68/MWh.
According to Irena, since 2010, utility-scale solar has seen the sharpest cost decline at 82%, with onshore wind at 39% and offshore wind at 29%.
Irena’s intervention comes as the clean energy sector turns up the heat on governments planning economic stimulus packages after the Covid pandemic, amid fears that some will backtrack on plans to shift to renewables in a bid to prop up fossil-fuel-centric areas of the economy.
China, for example, the world’s biggest renewable energy market is also continuing to add new coal plants, with some suggestions that the country will go easier on the polluting fuel source, at least in the short term, to help keep power prices low.
Renewables advocates hope that investor pressure on the world’s largest energy players will speed-up plans to exit coal. German group RWE was recently placed on an investment blacklist by the world’s largest sovereign wealth fund over its ongoing coal reliance.