Irena estimates that, given the current high prices of fossil fuels, the addition of renewable energy in 2021 will reduce global power generation costs by about $55 billion in 2022. "Renewables are by far the cheapest form of energy supply today," said Francesco La Camera, Director General of Irena. The benefits are many: renewables free economies from volatile fossil fuel prices and imports, dampen energy costs and increase market resilience - even more so if the energy crisis continues," La Camera stressed.
Costs for wind and photovoltaics drop significantly
The new Irena report confirms the crucial role that cost-effective renewables play in addressing the current energy and climate challenges. Moreover, solar and wind energy, with their relatively short project lead times, are important pillars for rapidly reducing the use of fossil fuels.
See also: EU solar set to save additional 4.6 BCM gas in 2022
Irena
The cost of electricity from onshore wind power fell by 15 per cent, offshore wind by 13 per cent and solar PV by 13 per cent compared to 2020. High coal and gas prices in 2021 and 2022 will also significantly worsen the competitiveness of fossil fuels and make solar and wind power even more attractive, concludes Irena chief La Camera.
Risk of stranded assets is looming
Given the unprecedented rise in European fossil gas prices, for example, fossil gas power generation in Europe will become increasingly uneconomic over its lifetime, increasing the risk of so-called stranded assets. The European example shows that the cost of fuel and carbon dioxide emissions for existing gas-fired power plants in 2022 could be on average four to six times higher than the lifetime cost of green power plants installed in 2021. (nhp/mfo)
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