Cost of renewable energy will fall further globally

Subject

Declining costs of renewable energy.

Significance

Recent auctions and 'levelised cost of energy' (LCOE) studies show that the costs of wind and solar photovoltaic power are now competitive with fossil-fuel power generation in an increasing number of scenarios.

Impacts

• Competitive renewable energy costs will encourage governments to adopt renewables as first-choice technologies.
• While positive for emissions, higher renewables adoption will slow growth in international fossil fuel trade to the detriment of exporters.
• Variable renewable energy growth will increase demand for system-balancing technologies, such as interconnectors and electricity storage.