PARIS—While it’s no secret the cost of producing electricity from renewable sources such as wind and solar has been falling for years, a joint International Energy Agency-Nuclear Energy Agency report now says the cost of renewable energy is virtually comparable, or even below the cost of traditional energy.
The report details the many factors that contribute to the cost of energy production from a variety of different power plants. It outlines a “significant” price drop in solar and wind generation costs, especially within the solar photovoltaic space, largely due to sustained technological progress. Also notable is nuclear power’s cheap price tag compared to coal and gas-fired plants.
“That drop [in the costs of renewables], as well as a plateauing in the price of new nuclear energy plants, helped arrest cost inflation in electricity generation over the past five years,” the report noted.
Still, the IEA/NEA say no single technology proves to be the cheapest form of electricity generation in all circumstances.
“Many factors determine the final cost of any investment, principally local influences such as market structure, policy environment and resource endowments,” the agencies added.
The report analyzed generating costs at more than 180 plants in 22 countries, including fast-growing markets such as China and Brazil.
“While the costs of renewable technologies in some higher priced markets can be well above that of coal- or gas-fired plants… utility-scale solar PV and especially onshore wind power are comparable and often lower in countries featuring plentiful resources and appropriate market and regulatory frameworks,” the report says.