Will green power generation costs be cheaper than coal-burning? IRENA’s report arouses shocks

The rapid decline in renewable energy costs has threatened the survival of coal-fired power plants

This trend is mainly related to the rapid development of technology. In 2018, the weighted-average cost of electricity from all commercially available renewable power plants falls in the fossil fuel cost range. The rapid decline of green energy costs in recent years has put the operation of traditional power plants in many developed countries at risk. For example, coal power generation in the United States has fallen by more than 40% since 2007, while coal power generation in the UK still accounted for 40% of total power generation in 2013, but it fell sharply to 6% last year, and the UK has gone one week without using any coal power in this year. On the whole, the percentage of green power generation has jumped from 12% to 28%.

The global average cost of commercial green power plants has fallen rapidly in recent years, and the orange color is the fossil fuel cost range (Source: IRENA Renewable Power Generation Costs)

It can be seen from the Figure that in 2018 alone, the cost of the global solar PV and onshore wind power fell by 13% compared with the previous year; biomass energy fell by 14%, hydropower fell by 11%, and geothermal and offshore wind power fell by 1%. Most notably, several concentrated solar power (CSP) plants around the world were put into operation successively at the end of last year, and the cost of CSP fell by as much as 26% last year! The reasons for the decline in costs can be attributed to the fact that solar thermoelectricity can be accompanied by installed energy storage facilities to store thermal energy, so it is not affected by no sunlight at night, and the number of hours in power generation can still be increased.

Of course, with the development of technology year by year, costs of solar PV and onshore wind power facilities also reduce, and the capacity factor (which can be understood as the proportion of annual power generation) rises, so that levelized cost of electricity (LCOE) in the whole life cycle drops sharply. According to the estimate of IRENA, the cost of solar PV and onshore wind power will continue to fall steadily in the future; the cost of solar PV power will fall by 13%, to US$ 0.048 (about NT$ 1.44) / kwh in 2020, and that of onshore wind power will fall by 8%, to US$ 0.045 (about NT$ 1.35) / kwh.

Costs of various kinds of green power plants fell in 2018 (Source: IRENA Renewable Power Generation Costs)

Small hydropower and geothermal power also have potentials for development in Taiwan

Of course, the low price has driven the rapid development of wind power and PV power. The global installed solar PV capacity reached 60GW, accounting for about 55% of the total renewable energy, while installed onshore wind power capacity reached 45GW, and hydropower capacity reached 21GW last year. In addition to the relatively mature hydropower, wind power and PV power, other renewable energy sources also have considerable potentials for development. In recent years, due to the risk that large hydropower plants may affect the ecological environment, it is difficult for many countries to find appropriate sites for construction. On the contrary, small hydropower generation is a better solution, because there is less need for large-scale construction, which gradually arouses people's interest. In recent years, the small hydropower capacity factor of various countries has reached about 46%~67%, which is similar to the factor of 34%~62% of large hydropower generation. This shows that even small hydropower plants may not generate less power than large hydropower plants when there is plenty of water. Taiwan has high mountains and swift torrents, and the drop height of rivers is big, so the development of small hydropower may be a solution that gives consideration to both ecological and local energy needs.

In terms of geothermal power generation, the global LCOE mostly falls in the low standard of fossil fuel cost, and the capacity factor mostly falls in the high-grade range of 80%-90%. It can be said that the year-round renewable energy power generation has great potential and low cost. Taiwan, rich in geothermal resources, may be able to develop in this direction, making geothermal power generation the third foot of green energy power generation in addition to wind and PV power generation.

Since the cost of building new power plants for renewable energy is getting lower and lower, countries should develop renewable energy vigorously, whether from the point of view of economy or carbon reduction. The supporting intelligent power grid, power grid management and energy storage facilities are also becoming more and more important. The report points out that in the future, not only will the cost of power generation be taken into account, but also the cost of the overall system as well gradually. The combination of power generation from various green energy will be the blueprint for the global energy ratios in the future.

The costs of solar power plants in various countries decline significantly(Source: IRENA Renewable Power Generation Costs)

【Reference】IRENA-Renewable Power Generation Costs in 2018