Terrawatt Initiative has launched a report discussing the challenges of achieving renewable energy KWh ‘well below’ 2 cents globally, before the end of the decade.
For the world to achieve a successful energy transition, renewable energy cost per KWh needs to be well below 2 cents by 2030, according to the report.
According to Terrawatt Initiative, bringing solar energy costs per KWh below 2 cents will enable the electrification of end uses, light, heat, mobility; storage; new energy carriers; green hydrogen; and many other socially indispensable innovations, ensuring they become economically viable.
This will also build a new energy regime that allows everyone to have access to affordable, reliable, sustainable and modern energy.
The organisation is urging a collaborative approach between governments and global energy stakeholders and public, industrial and financial authorities in accelerating the deployment of solar energy projects.
Only five years ago, well below 2 cents per kWh was considered unrealistic, according to a statement.
The main challenge to reducing the price of solar energy is the generalisation of this price level everywhere and at all levels, especially for the most vulnerable.
Jean-Pascal Pham-Ba, Secretary General and spokesperson at Terrawatt Initiative, said: “Based on our entrepreneurial experience in solar energy, we wanted to share some of the lessons learned from years in the field to systematically reduce the cost of renewable energy to less than 2 cents per kWh and thus pave the way for a profound and necessary transformation of the energy system.
“All of the ideas we have proposed: de-risking, pooling, aggregation, granularity, standardisation, etc. are now widely accepted. They are coming to life in operational tools such as the Open Solar Contracts [of IRENA], the Sustainable Renewables Risk Mitigation Initiative [of the International Solar Alliance, IRENA, the World Bank and the French Development Agency], and others.”
Eric Scotto, the CEO of Akuo Energy, adds: “In august 2019, Akuo broke a world-record price in Portugal, well below 2cts, namely 1,47cts, the lowest price in Europe. Our success is a demonstration of the Terrawatt Initiative’s conclusions: it is feasible to go well below 2 cts.
“To achieve such a price, and in accordance with the conclusions of the initiative, it is necessary to (1) adopt a long-term position in a given country; (2) aggregate projects so as to benefit from the volume both for construction and financing; and (3) de-risk the investment thanks to long term PPAs. These conditions cannot be met if a government fails to provide long-term signals about its renewable energy policy and ambitions: bold decisions by governing bodies are thus key. Akuo believes Portugal is leading by example and we trust this trend will continue across a large part of the world.”
Launched at COP 21 by a group of energy, industry, technology and finance visionaries, Terrawatt Initiative is an entrepreneurial effort to answer the tough questions of the energy transition: how can a nascent clean energy system outcompete the existing fossil fuel system at global level? How to outcompete a system which is so deeply embedded in our societies? How is it possible within ten years?
Click here to learn more about the Terrawatt Initiative.