The Surge in Renewables: A Decade of Cost-Effective Transformation

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Global weighted average total installed costs, capacity factors and LCOE from newly commissioned
solar PV, onshore wind power and offshore wind power, 2010-2022

Global Surge in Renewable Competitiveness In the past decade, the global renewable energy sector witnessed an extraordinary metamorphosis. From being a hopeful alternative to fossil fuels, renewables, particularly solar and wind, emerged as not just sustainable but economically viable power sources. Between 2010 and 2022, the improvements in renewable power’s competitiveness reached unprecedented levels, making the shift from fossil fuels to renewables both an environmental and economic imperative.

Solar and Wind: Leaders of the Pack Solar PV saw a sensational decline from a global weighted-average levelised cost of electricity (LCOE) of USD 0.445/kWh in 2010 to an astounding USD 0.049/kWh in 2022. This price decline of approximately 89% meant solar power was no longer a luxury but a cost-effective solution, being 29% lower than the cheapest fossil fuel alternative.

Similarly, onshore wind power underwent a remarkable transformation. From USD 0.107/kWh in 2010 to USD 0.033/kWh in 2022, the price fell by nearly 69%, making it 52% cheaper than the lowest-priced fossil fuel option.

Economic Factors Driving the Change Despite facing equipment price hikes and overall solar wind power cost inflation between 2021-2022, the competitiveness of renewables remained undeterred. With fossil fuel prices soaring, renewable energy’s economic advantage solidified further. By 2022, an astounding 187 gigawatts (GW) of newly commissioned utility-scale renewable power generation projects could produce electricity at costs lower than the fossil fuel-based average.

Indian Context: A Renewed Focus on Renewables India, with its vast landscape and an insatiable appetite for energy, has played a pivotal role in driving down renewable energy costs. Adopting renewable energy at scale, the nation has not only harnessed the economic benefits of solar and wind technologies but has also positioned itself as a leader in sustainable energy initiatives. By integrating advancements in technology and fostering competitive supply chains, India stands as a testament to the potential of renewable energy.

The Underrated Heroes: CSP, Bioenergy, Geothermal, and Hydropower While solar and wind have been at the forefront, other renewable sources also displayed commendable cost declines. Concentrating Solar Power (CSP) observed its global weighted-average LCOE plummet from being 591% higher than the most affordable fossil fuel option in 2010 to just 71% higher in 2022.

Bioenergy showcased stability, with its global weighted-average LCOE of USD 0.061/kWh in 2022 being 25% lower than its 2010 value. The ever-dependable geothermal energy saw its LCOE decrease by 22% in 2022, reflecting its continued relevance. Hydropower, despite its challenges, added a significant 347 GW capacity between 2010 and 2022.

The Road Ahead With the global weighted average capacity factor for renewables showing consistent performance and total installed costs demonstrating a declining trend, the future of renewable energy appears brighter than ever. The persistent efforts in research, technology advancements, and a collective global commitment to combat climate change are paving the way for a sustainable future, where renewables don’t just coexist but lead the energy landscape.

In conclusion, the last decade has borne witness to an unparalleled transformation in the realm of renewable energy. As technological advancements continue to push boundaries, and with the collaborative effort of nations globally, renewable energy is poised to be the cornerstone of our sustainable future.

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