India is the Asia-Pacific country with the lowest renewable energy cost, according to a new research note released by independent research company Wood Mackenzie.
The levelized cost of electricity (Lcoe) fell to $38 per megawatt-hour (MWh) this year, thanks to solar photovoltaic (PV). It’s 14% cheaper than coal-fired power, Kallanish Energy learns.
Lcoe is the average revenue per unit of electricity generated required to recover the costs of building and operating a generating plant over its life cycle.
India has installed power capacity totaling 421,000 megawatts (MW), with solar capacity expected to reach 38,000 MW this year. It’s the second largest market in the Asia-Pacific area.
“High-quality solar resources, market scale and competition have pushed solar costs down to half the level seen in many other Asia-Pacific countries,” said Wood Mackenzie research director Alex Whitworth, in a release.
Also, Australia has seen a fall in solar Lcoe, decreasing 42% in the past three years, and soon to reach $48/MWh in 2020. At that price, it will be cheaper than fossil fuels.
Both countries have historically been relying on coal. Environmental regulations have been restricting its use in Australia, which is also gas-rich.
However, the growing gas exports have been driving domestic prices higher. According to researchers, energy storage can complement renewables to ensure grid stability.
In the rest of the region, the average Lcoe for wind and solar is still 29% higher than coal, a difference forecast to disappear by 2027, and reversing to renewables being 17% cheaper by 2030.
“We are living through a revolution in the costs of renewable power technology,” said Whitworth. “This will create both opportunities and disruption in the industry.”
