What is the cheapest source of renewable energy?

What is the cleanest source of energy

62% of renewable power generation in 2020 (162 GW) had lower costs than the cheapest fossil fuel option, says the recent report by the International Renewable Energy Agency (IRENA). Renewable energy would save USD 156 billion for emerging economies.

“Today, renewables are the cheapest source of energy,” said IRENA Director General Francesco La Camera. “Renewables present coal-bound countries with an economically attractive phase-out agenda that ensures they meet growing energy demand, while saving costs, adding jobs, boosting growth and delivering on climate ambition. I am encouraged that more and more countries are choosing to power their economies with renewables and follow IRENA’s path to achieve net zero emissions by 2050.”

“Despite the challenges and uncertainty of 2020, renewable energy emerged as a source of undeniable optimism for a better, more equitable, resilient, clean and fair future” – IRENA CEO Francesco La Camera.

Which energy is cheaper to produce electricity

The finding adds to research showing why renewables are growing in most electricity markets. Last week, the International Energy Agency said solar power is starting to overtake coal as the cheapest form of electricity.

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But there is an economic limit to the growth of those clean energy sources, BNEF chief economist Seb Henbest told the research group’s annual conference in London on Monday. A saturation point will be reached in each country because the technology no longer reduces generation costs compared to running existing thermal generation plants.

Those limits indicate that renewables will gain no more than 70% or 80% of the market for electricity generation, depending on local conditions. Even in Europe, which has some of the strictest policies encouraging renewables over fossil fuels, wind and solar are unlikely to exceed 80% of supply.

Cheap clean energy

Renewable Energy is the energy obtained from virtually inexhaustible natural sources, either because of the immense amount of energy they contain or because they are capable of regenerating themselves by natural means.

The use of renewable energy sources by man is very ancient. Since many centuries before our era, renewable energies such as solar, wind and hydro were used by man in his domestic, agricultural, artisanal and commercial activities. This situation prevailed until the advent of the First Industrial Revolution in the 18th century, when renewable energies had to give way to fossil resources such as oil and coal, which at that time were offered as abundant and cheap sources of energy. The industrial revolution also triggered the social and economic changes that led to the subsequent development of the large hydroelectric industry, now considered a conventional renewable energy source.

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Nowadays, when the availability of fossil resources plays a determining role in the global and national energy supply, and when environmental factors appear among the main concerns of contemporary society, Renewable Energies are re-emerging with increasing success in all latitudes of the planet, encouraged by the constraints of energy supply and the presence of favorable regulatory frameworks.

Clean and cheap energy

By 2050, the Paris Climate Agreement requires that polluting emissions be reduced by 80% to 95% compared to 1990 levels. Almost the entire planet, 161 countries comprising 98% of the world’s population, signed the agreement which presents the urgent need to “decarbonize” the world’s economies.  Currently, one-fifth of these countries use nuclear power, and energy dependence on nuclear generation in advanced countries is high, especially in a scenario where fossil fuel sources are being phased out. In the United States, nuclear energy has a 20% share and in the United Kingdom it represents 20.9%.

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To summarize.  Responsible and efficient energy generation (and consumption) based mostly on renewable energies is the way to go in the future, and not only because of its “green” aspects. A Morgan Stanley research report asserts that renewable energies such as solar and wind will eventually prevail and neither politics nor multi-billion dollar interests will be able to stand in their way: