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0.50 0.45 0.50 0.45 Diesel-fired electricity cost range 0.40 OECD 0.40 Europe 0.35 OECD NA 0.35 0.30 Africa 0.30 0.25 Eastern 0.25 Utility-scale projects Europe 0.20 Other Asia 0.20 0.15 China 0.15 0.10 0.05 0.00 0.00 Range of fossil fuel power in OECD India Latin America 0.10 0.05 FIGURE 2.1: TYPICAL LCOE RANGES AND WEIGHTED AVERAGES BY REGION FOR RENEWABLE POWER GENERATION TECHNOLOGIES, 2012 Note: All LCOE data assume a 10% cost of capital. The large coloured bars represent the typical LCOE range by technology and the coloured horizontal lines the weighted average LCOE by country/region if enough individual project data are available. SOURCE: IRENA RENEWABLE COST DATABASE. What is clear however, is that with current prices for fossil fuels and conventional technologies, renewable technologies are now the most economic solution for off‐grid electrification and for centralised grid supply in locations with good resources. Renewable energy technologies can therefore help countries to meet their policy goals for secure, reliable and affordable energy, expand electricity access, promote development, improve energy security, promote economic development, reduce greenhouse gas emissions and reduce energy price volatility. On an economic basis renewables are now the default option for off‐grid electrification and virtually all electricity systems based predominantly on oil‐fired generation will see system generation costs fall by integrating renewables. Solar PV, biomass and wind are highly modular solutions to the challenge of extending electricity access to remote locations, and so help meet economic and social development goals. Renewable technologies can be significantly cheaper than diesel‐fired generation, particularly in remote areas with poor, or even non‐existent, infrastructure where transport costs can increase the cost of diesel by 10% to 100%. Different renewable power generation technologies can be combined in mini‐grids to electrify isolated villages and extend existing grid networks. The complementary nature of different renewable options, sometimes deployed in combination with small hydro with small reservoirs for storage or other electricity storage options, can help reduce the overall variability of supply to low levels and provide low‐cost, local electrification solutions that bring economic benefits at a lower cost than diesel‐ fired generation. However, a major challenge to the economics of these electrification projects is the high cost of capital, which can be two to three times higher in developing countries than in developed ones. The typical LCOE of new onshore wind farms in 2011 was between USD 0.06 to USD 0.14/kWh, assuming Renewable Power Generation Costs in 2012: An Overview 15 2011 USD/kWh Wind onshore Biomass Hydro small Hydro large Geothermal CSP Solar PV - utility scale Solar PV - residential / off grid Wind - small scalePDF Image | International Renewable Energy Agency
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