The case for new and much of existing coal power generation capacity is environmentally and economically unjustifiable says the International Renewable Energy Agency (IRENA).
In 2021, up to 1,200 gigawatts of existing coal power capacity could cost more to operate than new utility-scale solar power costs to install states a new report from the agency.
IRENA’s Power Generation Costs In 2019 report indicates more than half of the renewable capacity that was added last year achieved lower electricity costs than new coal power, while new solar and wind projects are also undercutting the cheapest and least sustainable (i.e. the dirtiest) existing coal-fired plants.
The analysis draws on information relating to 17,000 renewable power generation projects around the world (including Australia) and data from 10,700 auctions and renewables power purchase agreements (PPAs).
Renewable electricity costs have plummeted over the past decade. For example, the report states since 2010 the cost of utility-scale solar energy has dropped 82%. Just last year, electricity costs from utility-scale solar PV fell 13% to a global average of USD 6.8 cents per kilowatt-hour (kWh) – that works out to around AUD 9.86c per kilowatt hour at the current exchange rate.
“Auction results show these favourable cost trends accelerating, reinforcing the case to phase-out coal entirely,” states the report.
Francesco La Camera, Director-General of IRENA, says the world has reach an important turning point in the energy transition.
“Renewables must be the backbone of national efforts to restart economies in the wake of the COVID-19 outbreak,” he said. ” With the right policies in place, falling renewable power costs, can shift markets and contribute greatly towards a green recovery.”
IRENA states if the costliest 500 GW of existing coal power capacity were replaced by solar energy and wind power, it would translate to annual potential savings of USD $23 billion and avoid 1.8 gigatonnes (that’s 1.8 *billion* tonnes) of greenhouse gases a year – equivalent to 5% of total global CO2 emissions last year.
Australian Figures
With regard to Australia specifically, the report states weighted-average cost of electricity from utility-scale solar PV between 2010 and 2019 fell by 78% and the total installed cost of these clean power stations fell 82%. Between 2013 and 2019, the price of solar panels in Australia dropped 63%.
Residential PV gets a mention in the report as well, with the document noting the cost of solar in Australia dropping 73% between 2010 and 2019. For commercial solar, costs dropped by around half between 2014 and 2019.
IRENA’s full Power Generation Costs In 2019 report can be accessed here.
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Thanks Michael for your informative post.
But it seems to me that people like LNP Senator Matt Canavan and ALP Joel Fitzgibbon MP aren’t paying any attention. Canavan thinks coal-fired power is still cheapest and can outbid wind and solar at short-run marginal cost of $45/MWh – wind and solar have no fuel costs so they can go down to practically zero.
And Fitzgibbon says: “You will absolutely need a lot of gas.” Both ignore the escalating risks of dangerous climate change.
See: https://reneweconomy.com.au/abcs-qanda-old-fossils-versus-smart-advocates-of-clean-energy-transition-30759/
Posted at The Conversation on May 29 was a piece by Professor Andrew Blakers headlined “Really Australia, it’s not that hard: 10 reasons why renewable energy is the future”. His reasons include:
1. It can readily eliminate fossil fuels
2. Solar is already king
3. Solar and wind are getting cheaper
4. Stable renewable electricity is not hard
5. There’s enough land
6. Raw materials won’t run out
7. Nearly every country has good sun or wind
8. We will never go to war over sunshine
9. Solar accidents and pollution are small
10. Payback time is short
The real challenge I see is finding an affordable, abundant replacement for petroleum fuels. The post at energyskeptic on May 9 headlined “Will covid-19 delay peak oil?” explores the factors that may initiate a post- ‘peak oil’ world:
“As Table 1 above shows, global peak crude oil production may have already happened in October of 2018 (Patterson 2019), so no matter how many projects and oil wells are started after the pandemic, oil decline may be greater than production once a recovery begins because of less production from shut in wells and tar sands, and the projects that were halted in 2020 unable to keep up with the decline rate of oil. In a depression, companies will go bankrupt, leaving fewer to start new projects with what little capital is available, mainly extremely expensive offshore and deep-sea that can take ten years to produce oil.”
See: http://energyskeptic.com/2020/will-covid-19-delay-peak-oil/
So, have we seen global ‘peak oil’ supply already? How does that impact aviation? Will a global post- ‘peak oil’ world mean cheap aviation will be a distant memory post-COVID-19?
Renewables are not that hard for electricity generation. Finding affordable alternatives to oil are much, much harder and time is running out.
On alternatives to oil, electrification of transport has huge potential to reduce oil use, as well as reduce air pollution. Particularly with commercial vehicles, the reduced running costs can be quite attractive, and there are 400 000 EV buses already on the roads. I’m now on my second electric car, and the speed of improvement in range and battery longevity is impressive.Aviation is a tricky one, but some small electric planes are coming out. Electric shipping, such as ferries, is also happening. Of course, all this needs to happen at a rate of knots.
Liz Harris,
Worldwide vehicle registrations in 2017:
Car registrations: _ _ _ _ _1,015,643,000
Truck & bus registrations: _ 356,044,000
Total registrations: _ _ _ _ 1,371,687,000
See: https://en.wikipedia.org/wiki/Motor_vehicle
Vehicle registrations don’t include off-road vehicles and some agricultural and industrial vehicles.
There are more than 3 million electric cars operating globally.
I’d suggest there’s a very long way to go before electric cars/buses/trucks significantly reduce petroleum fuel use.
Then there’s rail transport. That could be electrified for some routes.
Then there’s shipping: 90% of international goods are moved by ships, and they burn a lot of fuel. I don’t see affordable, rapidly deployable solutions for long-range large ships. Back to sailing ships, perhaps?
See: http://energyskeptic.com/2020/fuel-consumption-by-containership-size-and-speed/
Aviation certainly is “tricky”. I’d suggest small, short-range/short-duration electric aircraft are not a viable replacement for wide-body, long-haul jet aircraft. Hydrogen power perhaps, but that requires new aircraft & how affordable will it be? I don’t see near-term solutions on the horizon.
The scale of the task to rapidly reduce petroleum fuel dependency is enormous!
Meanwhile, U.S. tight oil output fell one million barrels per day (-15%) from March to May to 7.2 mmb/d. Output should increase in the summer as shut-in wells are re-activated. Decline is inevitable with 216 rigs in May & 500 rigs needed to maintain 7 mmb/d.
See: https://twitter.com/aeberman12/status/1269982353130225664
“Rigs have been laid off, fracturing fleets have been laid off & they’re not going to come back until we see…$50 prices sustainably.”
–Vandana Hari, Vanda Insights
See: https://twitter.com/aeberman12/status/1269978020753874944
The longer fuel prices are suppressed the more petroleum companies are at risk of bankruptcy, and supply may be unable to rebound adequately to meet increasing demand post-COVID-19.
Moody’s has downgraded the US coal industry outlook, forecasting EBITDA to fall more than 50% in 2020. US thermal coal production is set to fall by more than 25% in 2020.
See: https://twitter.com/TimBuckleyIEEFA/status/1269483717497479168
Global seaborne thermal coal prices are collapsing.
See: https://twitter.com/TimBuckleyIEEFA/status/1268383609410355200/photo/1
As renewable and battery costs continue to decline, IEEFA foresees increased stranded thermal coal asset risks.
See: https://ieefa.org/ieefa-renewables-continue-to-break-records-despite-covid-19/
Everyone is watching investment giant BlackRock to see whether it follows through on its stated intention six months ago to withdraw from thermal coal.
See: https://www.smh.com.au/environment/climate-change/everyone-was-watching-blackrock-is-showing-its-hand-on-coal-20200605-p54zrx.html
Meanwhile, the US drill rig count (oil + gas) fell below the 300 mark last week – the lowest since records began, as energy companies continue to shut down drilling operations in the 13th straight week.
See: https://twitter.com/aeberman12/status/1269616191103959040
While oil prices remain in the $30 range it will be “not a sufficient clearing price for many leveraged shale producers”.
See: https://twitter.com/aeberman12/status/1269617113074995200
The world’s most eminent climate scientists and biologists believe we’re headed for the collapse of civilisation, and it may already be too late to change course.
See: https://voiceofaction.org/collapse-of-civilisation-is-the-most-likely-outcome-top-climate-scientists/
We live in interesting times!
I am struggling to see how renewables can reduce the price of electricity charged to consumers at their meter box.
I pay about AUD0.21 per kwh for electricity. I think there are three markups included in that. If we guess that each entity that touches our money wants a 30% markup then we have a total markup of about 2.2 times so the cost of electricity at the powerhouse gate would be about AUD0.09 per kwh.
I have heard that coal fired electricity costs around AUD0.09 kwh about USD0.06 at the gate.
These figures suggest that the most significant improvements can be made in reducing the margins and, dare I say, getting rid of the three layer system and convert the whole thing back into a single entity. There is no benefit in competition when the price should include respect for maintenance and improvements over a 60 year horizon but the companies who now own everyrthing have a profit horizon of 12 months.
Perhaps someone has better figures for costs that prove the above is wrong?