Renewable energy set to be cheaper than fossil fuels by 2020, according to new report

Renewable energy will be cheaper than fossil fuels in two years, 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 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.

10 photographs to show to anyone who doesn't believe in climate change

10 show all 10 photographs to show to anyone who doesn't believe in climate change

1/10 A group of emperor penguins face a crack in the sea ice, near McMurdo Station, Antarctica Kira Morris

2/10 Amid a flood in Islampur, Jamalpur, Bangladesh, a woman on a raft searches for somewhere dry to take shelter. Bangladesh is one of the most vulnerable places in the world to sea level rise, which is expected to make tens of millions of people homeless by 2050. Probal Rashid

3/10 Hanna Petursdottir examines a cave inside the Svinafellsjokull glacier in Iceland, which she said had been growing rapidly. Since 2000, the size of glaciers on Iceland has reduced by 12 per cent. Tom Schifanella

4/10 Floods destroyed eight bridges and ruined crops such as wheat, maize and peas in the Karimabad valley in northern Pakistan, a mountainous region with many glaciers. In many parts of the world, glaciers have been in retreat, creating dangerously large lakes that can cause devastating flooding when the banks break. Climate change can also increase rainfall in some areas, while bringing drought to others. Hira Ali

5/10 Smoke – filled with the carbon that is driving climate change – drifts across a field in Colombia. Sandra Rondon

6/10 A river once flowed along the depression in the dry earth of this part of Bangladesh, but it has disappeared amid rising temperatures. Abrar Hossain

7/10 Sindh province in Pakistan has experienced a grim mix of two consequences of climate change. “Because of climate change either we have floods or not enough water to irrigate our crop and feed our animals,” says the photographer. “Picture clearly indicates that the extreme drought makes wide cracks in clay. Crops are very difficult to grow.” Rizwan Dharejo

8/10 A shepherd moves his herd as he looks for green pasture near the village of Sirohi in Rajasthan, northern India. The region has been badly affected by heatwaves and drought, making local people nervous about further predicted increases in temperature. Riddhima Singh Bhati

9/10 A factory in China is shrouded by a haze of air pollution. The World Health Organisation has warned such pollution, much of which is from the fossil fuels that cause climate change, is a “public health emergency”. Leung Ka Wa

10/10 Water levels in reservoirs, like this one in Gers, France, have been getting perilously low in areas across the world affected by drought, forcing authorities to introduce water restrictions. Mahtuf Ikhsan

“This new dynamic signals a significant shift in the energy paradigm,” said Adnan Amin, director-general of the International Renewable Energy Agency (IREA), which published the report.

“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.

“If the stuff you’re building to generate electricity costs less, the end effect of that is having to pay less for the electricity that comes from it,” Jonathan Marshall, energy analyst at the Energy and Climate Intelligence Unit (ECIU) told The Independent.

“The cheaper you install it, the better it is for everyone.”

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.

“These cost declines across technologies are unprecedented and representative of the degree to which renewable energy is disrupting the global energy system,” said Mr Amin.

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.

However, current UK policy may hamper the development of renewable energy capacity.

“Under current policy, the UK is at risk of being left behind as other countries take full advantage of the relentless fall in the cost of renewable energy,” said Mr Marshall.

Notably, the subsidy ban for new onshore wind farms has been singled out, with the ECIU predicting it could add £1bn onto energy bills over five years.

“If the Government is serious about achieving the lowest cost electricity in Europe, the ban on onshore wind has to be first in the firing line,” said Mr Marshall.

“Until this happens – and all low-carbon electricity sources are allowed to compete on equal footing – the gap between the cost of electricity in the UK and elsewhere will prevail; to the ire of politicians, businesses and household bill payers.”

A spokesperson from the Department for Business, Energy and Industrial Strategy said the Government could still support onshore wind where there is local support, such as on the Scottish islands.

“We are pleased to see that established technologies, such as onshore wind and solar, are driving costs down for consumers,” they said.

“If this continues, and they have local support, they may play a significant role in the energy mix in future.

“Since 2010, the UK has invested more than £52bn in renewable energy and in October, we confirmed that up to £557m would be made available for future clean power auctions.”