Prepared by Suzanne Abou Said Daou As more than 190 nations prepare to broker a new climate agreement in Paris in December to limit carbon emissions from burning fossil fuels; a report of the Paris-based IEA International Energy Agency provides in detail the contrasting costs for different power generation technologies around the world and shows that renewable sources such as solar and wind has plunged significantly over the past five years, narrowing the gap with power generated from fossil fuels and nuclear reactors. And can produce electricity at close to or even below the cost of new fossil fuel-based power stations. The report “Projected Costs of Generating Electricity: 2015 Edition”, in its 8th edition studied costs at more than 180 plants – from large nuclear and fossil-fuel facilities to wind farms to residential-sized solar PV installations – in 22 countries, including Brazil, China and South Africa. The data were used to project, country by country and for the different technologies, what it would cost to generate electricity over the lifetime of a plant built to enter service in 2020. It also showed that new nuclear power plants generate electricity more cheaply than other established “base load” sources such as coal- and gas-fired power plants over the full lifetime of facilities when financing costs are relatively low. The report pointed that no single technology proves the cheapest form of electricity generation under all circumstances: many factors determine the final cost of any investment, principally local influences such as market structure, policy environment and resource endowments. The report analyses pressing issues in projecting costs of electricity generation: such as, how to price in the impact of renewable variability as well as changes in generation when the sun does not shine or the wind does not blow, and the effects of liberalization of prices on leveled cost of electricity (LCOE) and investment return, and the various technologies’ sensitivities to a carbon price. Also, the costs are expected to change considerably in the coming decades as new technologies are deployed. For example coal plants will become as much as 70 percent more expensive if they include equipment to capture carbon emissions while offshore wind and solar costs are expected to fall, the IEA study showed. New utility-size solar installations could produce power for less than $100 a megawatt-hour before 2025 in the sunniest regions while panels on rooftops could reach that level five years later. The report looks even further into the future by examining the potential cost of emerging technologies like ocean energy and fuel cells. And it also discusses the value and cost of generation from the perspective of the power system as a whole. The study concludes that no single technology is the cheapest under all circumstances and costs depend “highly” on available resources, labor costs and local regulations.
Preparing for COP 21, a detailed report finds Fossil Fuels Losing Cost Advantage over renewables![]()
