- The cost of electricity from onshore wind and solar photovoltaic (PV) fell by 15% and 13%, respectively
- 163 GW of newly added renewables in 2021 were at cheaper costs compared to the cheapest coal-fired plants in the G20
2021 was a year in which renewables became more competitive. A report by the International Renewable Energy Agency (IRENA) showed that the cost of electricity from onshore wind and solar photovoltaic (PV) fell by 15% and 13%, respectively, compared to the 2020 prices.
The Renewable Power Generation Costs in 2021 report showed that the global weighted average levelised cost of electricity (LCOE) of new onshore wind that was added in 2021 was reduced to USD 0.033 per kWh. Also, the price of new utility-scale solar PV declined to USD 0.048 per kWh. In the case of new onshore wind, excluding China, the cost decline was smaller, as it reduced by 12% year-on-year to USD 0.037 per kWh.
The offshore wind market, which recorded a major boost in the number of new installations with 21GW of new installations in 2021 that was driven by China, had its weighted average cost of electricity fall by 13% year-on-year to USD 0.075 per kWh.
According to IRENA, about 163GW of newly added renewables in 2021 were at cheaper costs compared to the cheapest coal-fired plants in the G20. IRENA calculates that renewable power that was added in 2021 will save at least USD55 billion from global energy generation costs in 2022.
In Europe, solar and wind generation avoided at least USD 50 billion in fossil fuel imports in the January-May 2022 period. “Renewables are by far the cheapest form of power today,” said IRENA director-general Francesco La Camera. “Renewable power frees economies from volatile fossil fuel prices and imports, curbs energy costs and enhances market resilience – even more so if today’s energy crunch continues,” he added.
In preparation for COP27 and COP28 in Egypt and the UAE, respectively, La Camera also encouraged governments to take advantage of the affordability of renewable energy in order to meet their net-zero targets while also meeting fulfilling their climate promises.