“Unbelievable to see that the cost of renewables has been decreasing also last year by two digits. (This) is three years in a row that it is decreasing by two digits,” Francesco La Camera said in an interview in Jakarta on Wednesday.
The report, released by the agency on July 13, 2022, states that the cost of renewables continued to fall in 2021 as supply chain challenges and rising commodity prices were yet to show their full impact on project costs.
It informed that the cost of electricity from onshore wind fell by 15 percent, offshore wind by 13 percent, and solar panels 13 percent compared to 2020.
According to La Camera, the declining price of renewables must provide a momentum for building more capacities for renewable energy.
In a large part of the world, renewables continue to be the best option even when compared to the cheapest coal option, he pointed out.
“This is something that is unstoppable. It is clear that we are moving to a new energy system. There is no doubt […] the direction of travel is clear,” he said.
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The agency’s report also affirmed the critical role of cost-competitive renewables in addressing energy and climate emergencies.
“Solar and wind energy, with their relatively short project times, represent vital planks in countries’ efforts to swiftly reduce, and eventually phase out, fossil fuels and limit the macroeconomic damages they cause in pursuit of (the) net zero (target),” the agency stated.
In the interview, La Camera said that measures to enable the energy transition to renewables must be accelerated in order to achieve the Paris Agreement goals.
To reach the goals, more investments need to be made in countries on renewable energy sources, which, in turn, can have a greater impact on the gross domestic product of the countries, he said, adding that they will generate more jobs than other technologies.
The IRENA reported that investments in renewables have also continued to generate large dividends in 2022.
The 109 GW of renewable energy additions in 2021, which cost less than the cheapest new fossil fuel-fired option, will reduce costs by at least US$5.7 billion annually for the next 25 to 30 years, it said.
“High coal and fossil gas prices in 2021 and 2022 will also profoundly deteriorate the competitiveness of fossil fuels and make solar and wind even more attractive. With an unprecedented surge in European fossil gas prices, for example, new fossil gas generation in Europe will increasingly become uneconomic over its lifetime, increasing the risk of stranded assets,” it added.
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Reporter: Aria Cindyara
Editor: Suharto
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