According to a new world energy report, investing in solar power projects would generate cheaper electricity for business and domestic customers in comparison to operating most of the globe’s existing coal power plants. The report highlights that firms could save billions of pounds, in addition to significantly reducing carbon emissions that pollute the Earth’s atmosphere.
More than 50% of the world’s coal plants could actually cost consumers more by the ever-decreasing cost of new large-scale solar initiatives. Compared to a decade ago, these projects now cost 80% less to build, according to the latest revealed figures.
The International Renewable Energy Agency (Irena) has determined that up to 1,200 gigawatts of the world’s current coal capacity could cost producers more to continually operate when measured against new sustainable solar plants.
According to Irena, energy firms could save up to $23 billion (£18 billion) each year if they were to only replace their most expensive coal plants with new solar power projects or onshore wind farms. This equates to more than 500GW of power across the world. By making this transition, they would also be able to reduce 5% of 2019’s total global carbon emissions.
A tremendous push towards renewable energy would also revitalise the world’s economy with over $940 billion in investment. This is the equivalent to 1% of the world’s gross domestic product. This is needed now more than ever as each country emerges from the coronavirus pandemic and the negative impact that has been felt on economies across the globe.
Francesco La Camera, the director-general of Irena, believes renewable energy is “increasingly the cheapest source of new electricity” and provides “tremendous potential to stimulate the global economy and get people back to work”.
The costs of large-scale solar projects have dropped by over 80% within the last 10 years. Furthermore, onshore wind projects have fallen by nearly 40%, and offshore wind has decreased by around 30%.
The costs of these renewable energy initiatives will continue to drop, according to the latest figures from Irena. Large-scale solar power costs fell by 13% last year to a global average of 6.8 US cents per kilowatt hour, while onshore and offshore wind costs both decreased by about 9% to 5.3 cents per kWh and 11.5 cents per kWh respectively.
La Camera goes on to say that: “Renewable investments are stable, cost-effective and attractive, offering consistent and predictable returns while delivering benefits to the wider economy. A global recovery strategy must be a green strategy,”
The agency explains that by expanding investment in renewable energy, this could generate monumental economic benefits, and would deliver nearly $100 trillion of global GDP gains between now and 2050.
La Camera said that: “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,”
The numbers clearly outline both the economic and environmental benefits of making the switch to sustainable fuel sources, it’s now in the hands of investors to make these firm commitments.