The world changed drastically in the opening months of 2020, with the COVID-19 pandemic forcing much of the world into lockdown. Now, as we move towards the new, post-COVID normality, renewable power generation must form a key part of global economic stimulus measures.
Installing new renewables increasingly costs less than the cheapest fossil fuels. With or without the health and economic crisis, dirty coal plants were overdue to be consigned to the past. But the cost data presented in this report – compiled from 17 000 real-word projects – confirms how decisively the tables have turned.
More than half of the renewable capacity added in 2019 achieved lower electricity costs than new coal, while new solar and wind projects are also undercutting the cheapest and least sustainable of existing coal-fired plants. Auction results show these favourable cost trends accelerating, reinforcing the case to phase-out coal entirely.
Next year, up to 1 200 gigawatts of existing coal-fired capacity could cost more to operate than new utility-scale solar photovoltaic (PV) costs to install, the report shows. Replacing the costliest 500 gigawatts of coal capacity with solar and wind would cut annual system costs by as much as USD 23 billion per year and reduce annual carbon dioxide (CO2) emissions by around 1.8 gigatonnes, or 5% of last year’s global total. It would also yield a stimulus worth USD 940 billion, or around 1% of global GDP.
Generation costs for onshore wind and solar PV have fallen between 3% and 16% yearly since 2010 – far faster than anything in our shopping baskets or household budgets. Renewables have outpaced fossil fuels in new power capacity additions overall since 2012. They are emerging as the default choice for new projects everywhere. Now, crucially, their continued cost decline
means the world can afford to be ambitious amid the crisis.
Post-pandemic stimulus packages would be greatly enhanced by these clean, easily scalable, cost-effective energy solutions. Scaling up renewables can boost struggling economies. It can save money for consumers, pique the appetites of investors and create numerous high-quality new jobs.
Renewables, meanwhile, align recovery measures with climate resilience, sustainable development and other medium- and long-term policy goals. Cutting carbon dioxide (CO2) emissions in line with the Paris Agreement remains as crucial as ever in the wake of COVID-19, while also offering tremendous potential to put millions of people back to work.
The same energy infrastructure needed to meet today’s needs can also pave the way for a far better future. Investment in renewables equates with investing in health, sustainability and inclusive prosperity. Moreover, as the report underscores, the more we deploy these technologies, the more their costs will fall.