The cost of producing electricity from renewable sources like solar and wind has dropped significantly in the past five years, while rising for power generated from natural gas, coal and nuclear, according to the International Energy Agency.
“The cost of renewable technologies—in particular solar photovoltaic—has declined significantly over the past five years,” the Paris-based IEA said in a report called Projected Costs of Generating Electricity. “These technologies are no longer cost outliers.”
The median cost of producing so-called baseload power that is available all the time from gas, coal and nuclear reactors was about $100 a megawatt hour for 2015 compared with about $200 a megawatt hour for solar, which has dropped from $500 a megawatt hour in 2010.
The findings come as more than 190 nations intend to broker a new climate agreement in Paris in December to limit future fossil-fuel emissions. Power generation from fossil fuels, including coal, is one of the biggest sources of carbon emissions and so decisions about how to produce electricity will play a key role in curbing climate-altering gases.
The median costs of power generation from natural gas and coal rose over the five-year period, the agency said. For atomic energy, the findings indicate that costs are “roughly on par” with those reported in 2010, “thus undermining the growing narrative that nuclear costs continue to increase globally.”
Based on figures from 181 power plants in 22 countries, 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.
In Europe, governments have set targets for lowering carbon emissions and producing power from renewable sources like solar and wind. The UK is in the process of making a final decision on developing costly nuclear plants while Germany has increased generation from coal, the dirtiest fossil fuel, following a phase-out of atomic plants after the Japanese disaster at Fukushima.
