Renewable energy must feature heavily in global economic stimulus measures after the Covid-19 pandemic to help create jobs, protect the climate and “boost struggling economies”, Irena director-general Francesco La Camera wrote in his foreword to Irena’s energy report published yesterday.
“Post-pandemic stimulus packages would be greatly enhanced by these clean, easily scalable, cost-effective energy solutions… in line with the Paris Agreement [which] remains as crucial as ever in the wake of Covid-19, while also offering tremendous potential to put millions of people back to work,” he wrote.
Irena forecasts the global weighted-average electricity cost for onshore wind will fall by a further 18% between 2019 and 2021. This decrease follows a 39% drop between 2010 and 2019 - from $86/MWh to $53/MWh.
Onshore wind now "consistently outcompetes even the cheapest fossil-fuel-fired source of new electricity", Irena added.
The global renewable power fleet has continued to grow in 2020 despite the Covid-19, pandemic but warns that total capacity additions will be lower than anticipated because of the virus. A “small number of onshore wind project commissioning dates may slip into 2021”, Irena suggests.
Of the onshore projects expected to be commissioned in 2021, 62% (15GW) have electricity costs lower than the cheapest fossil fuel-fired new capacity option, which stands at $50/MWh, the report states.
Offshore wind costs have also fallen, albeit at a slower pace than onshore wind, according to Irena’s research. The global weighted-average LCoE of offshore wind declined by 29% between 2010 and 2019, from $161.MWh to $115/MWh - including a 9% year-on-year fall in 2019 alone.
At the same time, the continuing innovation in turbine technology, larger turbine ratings, and industry experience saw offshore wind average capacity factors rise from 37% in 2010 to 44% in 2019.
The report advocates replacing the costliest 500GW of coal capacity with solar and wind, which would cut annual system costs by up to $23 billion per year and yield a stimulus worth $940 billion, or around 1% of global GDP. By replacing the costliest coal capacity with renewables annual carbon dioxide (CO2) emissions would fall by around 1.8 gigatonnes, or 5% of last year’s global total.
Irena's La Camera added: “Renewables offer a way to align short-term policy action with medium- and long-term energy and climate goals. Renewables must be the backbone of national efforts to restart economies in the wake of the COVID-19 outbreak.
"With the right policies in place, falling renewable power costs, can shift markets and contribute greatly towards a green recovery.”
While LCoE figures have been given a prominent place in the report, the Global Wind Energy Council (GWEC) last month argued that this has created a "race to the bottom" that is challenging the sustainability of the wind-industry supply chain and companies.