The cost of electricity generated by new renewable power projects once again declined for projects commissioned during 2017, continuing a trend that has been underway for years. These findings were presented by the International Renewable Energy Agency (IRENA) in its report ‘Renewable Power Generation Costs in 2017‘.

“In 2017, as deployment of renewable power generation technologies accelerated, there has been a relentless improvement in their competitiveness,” the report said.

The report was compiled with the help of IRENA’s renewable cost database, which contains the data for around 15,000 utility-scale projects. It also took into account a separate database of auction results and other competitive procurement processes for around 7,000 projects.

The report also found that the results of recent renewable power auctions indicate that cost reductions are on track to continue to the year 2020 and beyond.

The three primary reasons given for this declining trend were; better technology, competitive procurement, and a large base of experienced, internationally active project developers.

Electricity generated by renewables globally will soon be consistently cheaper than energy derived from fossil fuels. By 2020, all of the renewable power generation technologies that are now in commercial use will fall within same cost range as fossil fuel-fired generation, with most at the lower end or even undercutting fossil fuels, the report predicts.

The IREDA report also highlights that by the year 2019, the best onshore wind and solar PV projects will be delivering electricity for $0.03/kWh or less, which is considerably lower than the current cost.

Recent auction results signal that offshore wind and concentrating solar power projects commissioned between 2020-22 will have costs that range from $0.06-0.10/kWh, the report adds.

Recent auctions held in India also lend support to the findings in the IREDA report. Both solar and wind tariffs have been undergoing a steep decline over the past year.

In December 2017, Mercom reported that wind power tariffs dropped to a record-low level of ₹2.43 (~$0.038)/kWh quoted in the Gujarat Urja Vikas Nigam Ltd. (GUVNL) 500 MW auction.

In May 2017, Mercom also reported on a steep decline is solar tariffs. In the 500 MW Bhadla Phase-III Solar Park auction, ACME quoted a tariff of ₹2.44 (~$0.037)/kWh, which was almost 6.9 percent lower than the previous low tariff quoted in the Bhadla Phase-IV Solar Park auction of ₹2.62 (~$0.0405)/kWh. In the next 250 MW Bhadla Solar Park auction held in December 2017, Azure Power won a bid to develop 200 MW by quoting a low tariff of ₹2.48 (~$0.0388)/kWh.

Image credit: Wikimedia Commons

Ankita is an editor at MercomIndia.com where she writes and edits clean energy news stories and features. With years of experience in the news business, Ankita has a nose for news and an eye for detail. Prior to Mercom, Ankita was associated with The Times of India as a copy editor for the organization’s digital news desk. She holds a Bachelor’s degree in Psychology from Delhi University and a Postgraduate Diploma in journalism. More articles from Ankita Rajeshwari.