7/17/2021 Electricity from Renewable Energy Sources is Now Cheaper than Ever - Visual Capitalist

Electricity from Renewable Energy Sources

Now Cheaper than Ever
Published 2 weeks ago on July 5, 2021
By Govind Bhutada

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7/17/2021 Electricity from Renewable Energy Sources is Now Cheaper than Ever - Visual Capitalist

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The Briefing
Electricity from new solar photovoltaic (PV) plants and onshore wind farms is now cheaper than electricity
from new coal-fired power plants

The cost of electricity from solar PV plants has decreased by 90% since 2009

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7/17/2021 Electricity from Renewable Energy Sources is Now Cheaper than Ever - Visual Capitalist

The Transition to Renewable Energy Sources

Renewable energy sources are at the center of the transition to a sustainable energy future and the
fight against climate change.

Historically, renewables were expensive and lacked competitive pricing power relative to fossil fuels.
However, this has changed notably over the last decade.

Renewables are the Cheapest Sources of New Electricity

Fossil fuel sources still account for the majority of global energy consumption, but renewables are
not far off. The share of global electricity from renewables grew from 18% in 2009 to nearly 28% in
2020.

Renewable energy sources follow learning curves or Wright’s Law—they become cheaper by a
constant percentage for every doubling of installed capacity. Therefore, the increasing adoption of
clean energy has driven down the cost of electricity from new renewable power plants.

2009 Cost 2020 Cost % Change in

Energy Source Type
($/MWh) ($/MWh) Cost
Solar Photovoltaic Renewable $359 $37 -90%
Onshore Wind Renewable $135 $40 -70%
Gas - Peaker Plants Non- $275 $175 -36%
renewable
Gas - Combined Cycle Plants Non- $83 $59 -29%
renewable
Solar thermal tower Renewable $168 $141 -16%
Coal Non- $111 $112 +1%
renewable
Geothermal Renewable $76 $80 +5%
Nuclear Non- $123 $163 +33%
renewable

Solar PV and onshore wind power plants have seen the most notable cost decreases over the last
decade. Furthermore, the price of electricity from gas-powered plants has declined mainly as a
result of falling gas prices since their peak in 2008.

By contrast, the price of electricity from coal has stayed roughly the same with a 1% increase.
Moreover, nuclear-powered electricity has become 33% more expensive due to increased
regulations and the lack of new reactors.

When will Renewable Energy Sources Take Over?

Given the rate at which the cost of renewable energy is falling, it’s only a matter of time before
renewables become the primary source of our electricity.

Several countries have committed to achieving net-zero carbon emissions by 2050, and as a result,
renewable energy is projected to account for more than half of the world’s electricity generation by
2050.

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