Renewable energy will be cheaper than fossil fuels in two years’ time, according to a new report.
Experts predict that investment in green infrastructure projects will lead to decreases in the cost of energy for consumers.
Continuous technological improvements have led to a rapid fall in the cost of renewable energy in recent years, meaning some forms can already comfortably compete with fossil fuels.
The report by International Renewable Energy Agency (IREA) suggests this trend will continue and that by 2020 “all the renewable power generation technologies that are now in commercial use are expected to fall within the fossil fuel-fired cost range”.
Of those technologies, most will either be at the lower end of the cost range or actually undercutting fossil fuels.
Adnan Amin, director general of the International Renewable Energy Agency, said: “This new dynamic signals a significant shift in the energy paradigm. Turning to renewables for new power generation is not simply an environmentally conscious decision, it is now – overwhelmingly – a smart economic one.”
The report looked specifically at the relative cost of new energy projects being commissioned.
As renewable energy becomes cheaper, consumers will benefit from investment in green infrastructure. The current cost for fossil fuel power generation ranges from around 4p to 12p per kilowatt hour across G20 countries.
By 2020, IREA predicted renewables will cost between 2p and 7p, with the best onshore wind and solar photovoltaic projects expected to deliver electricity by 2p or less next year.
Other methods of producing renewable energy, such as offshore wind farms and solar thermal energy, are not yet as competitive as fossil fuels. However, the results of recent renewable power auctions for projects to be commissioned in the coming years suggest these forms too are due to drop in price. Auctions provide a useful means of predicting the future cost of electricity.
Mr Amin added: “These cost declines across technologies are unprecedented and representative of the degree to which renewable energy is disrupting the global energy system.”
The new report comes after 2017 was declared the UK’s greenest year ever by WWF, when data from the National Grid revealed 13 different renewable energy records had been broken.