Renewable energy for electricity will be cheaper than coal in most Asia-Pacific countries by 2030, according to Wood Mackenzie analysis.
India and Australia, leaders in the Asian renewable energy market
According to Wood Mackenzie‘s analysis, new investment in renewables is expected to be 23% lower than the average cost of coal-fired electricity by the end of the decade across the region. The many investors attracted by renewable energies have led to massive competition and lower costs. While today this sustainable resource still costs 16% more on average than coal power, it will still be cheaper than gas power in 2019.
India and Australia are currently the only countries in the region where renewable energy is cheaper than coal. India has a leading position in the Asia-Pacific region in this field. This is due in part to low construction and labor costs and good renewable resources. Rishab Shrestha, senior analyst at Wood Mackenzie, said for :
“Today, India and Australia are the only markets in the Asia-Pacific region where renewable energy is cheaper than new-build coal. However, by the end of the decade, we can expect almost every market in the region to have renewable energy available at a lower price than the cheapest fossil fuel.
Lower costs in all countries of the region
According to the study, Vietnam, thanks to its natural resources, will see its photovoltaic energy become cheaper than coal energy as early as next year. South Korea and Taiwan will see the cost of renewable energy be about 30% cheaper than fossil fuel by the end of the decade. A modest carbon price would also accelerate the construction of new solar and wind power plants.
Government policy essential to attracting investors
The premium for renewable energy in Northeast Asia is currently about 25% on average due to high labor, environmental permit costs… In Southeast Asia the premium is 30% because of the low cost of coal in 2020.
“Despite the low cost of renewables, government policy remains critical going forward to attract investors, manage grid reliability and transmission upgrades, and encourage battery storage to manage the intermittency of renewable energy.”
In China the cost of this premium is expected to reach 40% this year. This region could therefore, thanks to a decrease in the cost of renewable energy, see an increase in the number of wind turbines and solar panels.