Renewable energy prices remain competitive with fossil fuels, at a time when oil and gas costs are rising all over the world and particularly in Europe, with the war in Ukraine.
This is the result of a report by the International Renewable Energy Agency (IRENA) – “Renewable Power Generation Costs in 2021” – which reveals that nearly two-thirds (163 gigawatts) of renewable energy on the market last year has lower costs than cheaper coal production options in the G20 countries, which make up the most developed economies in the world.
This is because the production price of this “green” energy continued on a downward path last year – onshore wind energy fell by 15%, offshore wind energy lost 13%, while photovoltaic solar energy also recorded a decrease of 13% – compared to 2020.
The indicators released this Wednesday also show that the renewable energy produced last year allows for savings of 55 billion dollars (54.8 billion euros) in the global costs of energy production.
“Renewable energies are by far the cheapest form of energy today” explains Francesco La Camera, Director General of IRENA.
“2022 is a stark example of how economically viable new generation renewable energy has become. Renewable energy frees economies from price volatility and fossil fuel imports, lowers energy costs and increases market resilience – even more if the current energy crisis continues,” continues La Camera.
Regarding the war in Ukraine and the impact on energy costs, the director general explains that “while a temporary response to the crisis may be necessary in the current situation, excuses to soften climate targets will not be valid in the medium and long term. today is a devastating reminder that renewable energy and energy savings are the future”.
The high prices of coal and gas last year and this year risk further deteriorating the competitiveness of fossil fuels, making solar and wind energy more attractive and financially sustainable, the IRENA report indicates.
In relation to supply chains, the agency adds that not all of the increase in material costs has yet passed into equipment prices and the costs of “green” energy projects. If material costs remain high, the pressure on prices this year could be higher, but, the agency explains, the general gains from renewable energies still compensate for the increase in fuel prices.