The road towards achieving a sustainable energy future has now become cheaper than ever!
Renewable energy generation is at the heart of global decarbonization efforts to combat climate change.
According to Lazard’s most recent Levelized Cost of Energy (LCOE) analysis, the cost of renewable energy has continued to rapidly decline in 2021, with wind and solar costs reaching new lows. Over the last decade, wind energy prices have fallen 72% and solar photovoltaics have fallen 90% on average – putting renewable energy prices significantly below those for coal and gas generation. In other words, it is now cheaper to save the climate than to destroy it.
In order to continue paving the way towards a resilient, net-zero future, regulators should:
- Concentrate on supporting measures in wholesale power markets that equalize affordable and clean energy sources with conventional fossil fuels.
- Explore carbon pricing strategies that can inherently improve renewable energy technologies’ cost-competitive nature against conventional, carbon-dependent technologies.
- Further innovation and development in order to scale technologies that advance and optimize the generation of clean energy.
Innovations and developments in the renewable energy space should focus on:
- Internalize factors, such as dispatch characteristics (e.g. Baseload and/or dispatchable intermediate capacity vs. peaking and/or intermittent technology capacity) just as conventional energy technologies must consider factors, such as fuel prices.
- Understand that the rate of energy costs will continue to decrease as markets begin to mature, but at a slower rate.
More information can be found here.