Utility solar dethrones coal as the cheapest power source in Asia

[Think. Again.]

Michelle Lewis, Feb 29 2024 - 11:15 am PT
Full Article: https://electrek.co/2024/02/29/utility-solar-dethrones-coal-as-the-cheapest-power-source-in-asia/

Renewable energy costs in Asia last year were 13% cheaper than coal and are expected to be 32% cheaper by 2030, according to a new study.

Source: Wood Mackenzie Asia Pacific Power & Renewable Services

According to Wood Mackenzie’s latest analysis of the levelized cost of electricity (LCOE) for the Asia Pacific (APAC) region, the LCOE from renewables reached a historic low in 2023. This is significant because it marks a shift toward making renewables increasingly competitive with coal, a mainstay in APAC’s energy mix. The driving force behind this trend is the substantial reduction in capital costs for renewable energy projects.

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Solar is cheapest and falling

The significant drop in solar power costs, by 23% in 2023, signals the end of supply chain disruptions and inflationary pressures. As a result, utility solar is now the cheapest power source in 11 out of 15 APAC countries. New-build solar project costs are expected to fall by another 20% by 2030 due to lower module prices and an oversupply from China.

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Wind power isn’t far behind

While solar is surging ahead in terms of cost-effectiveness, onshore wind isn’t far behind despite costs being 38% more than solar in 2023. With a forecasted 30% cost reduction by 2030 as cheaper Chinese turbines gain market share, Australia and Southeast Asia stand to benefit from low-cost wind power equipment imports.

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In contrast with falling renewables costs, coal and gas generation expenses have increased by 12% since 2020 and are projected to rise through 2050, primarily due to carbon pricing mechanisms.

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Full Article: https://electrek.co/2024/02/29/utility-solar-dethrones-coal-as-the-cheapest-power-source-in-asia/