Joint IRENA/IEA-RETD workshop - Levelised Costs of Renewable Energy: What if costs continue to drop?

Bonn, Germany

Equipment and project costs for many renewable technologies are falling, some rapidly, requiring policy makers and other stakeholders to adjust quickly. The International Renewable Energy Agency (IRENA) and the International Energy Agency (IEA) unit for the Renewable Energy Technology Deployment Implementing Agreement (IEA-RETD) jointly organised a workshop, “Levelised Costs of Renewable Energy: What if costs continue to drop?” to stimulate discussion on the consequences and future implications of declining costs in the sector.

The workshop on 26 October in Bonn, Germany, engaged over 60 participants from industry, government and research institutions in an open discussion on the implications of continued technology cost reductions. Industry representatives, scientists, academics and policy makers came together to present and discuss recent work by IRENA and IEA-RETD, while invited experts gave their perspectives on related issues, including system integration costs. The meeting raised awareness and addressed misperceptions about actual renewable energy technology costs, and prioritised actions needed in the next 3-5 years to ensure that policy changes anticipate developments in renewable energy markets.

The main conclusions of the workshop were as follows:

  • Cost reductions and performance improvements mean renewables are increasingly competitive;
  • Many misperceptions on the real costs of renewable energy still exist; and
  • Support policies for renewables must be shifted to the system level.

Participants agreed that costs will continue falling, and that policy makers, utilities and manufacturers need to continue working together to encourage this energy transition. Governments can facilitate it by putting a strong policy framework in place and encouraging industry and utilities to make the investments needed for a sustainable energy system. This is especially necessary given the rise of initial investment costs to reap lower system costs in the future.

IRENA and IEA-RETD defined three goals: to improve the availability of real project-cost data in the public domain; to encourage policy makers to think in terms of systems rather than technologies, remaining focused on cost reductions; and to address the new challenges of flexible integration and demand reduction in a creative and systematic way.

Further information is available on the IEA-RETD website here.

Agenda
List of participants
Biographies
Summary

Session 1 – Levelised costs of energy: presentation of recent IRENA and IEA-RETD work

Cost status and determining factors for renewable power generation
Michael Taylor, IRENA

IEA-RETD Study on Cost and Business Case Comparisons of Renewable versus Non-Renewable technologies
Mercedes Mostajo, PRYSMA S.A. (on behalf of IEA-RETD)

Session 2 – System integration costs

System integration costs - External costs of system integration for variable RE, comparing options on equal power quality
Carsten Hoyer-Klick, German Aerospace Centre, Institute of Technical Thermodynamics

The need for storage and backup capacity - The value of renewable balancing power and storage
Renée Heller, Ecofys Netherlands BV

The TSO/DSO perspective
Anders Bavnhøj Hansen, Energinet DK

Session 3 – Electric vehicle prospects for accelerated deployment of renewables

IEA-RETD Project RETRANS – The co-evolution of the electricity and transport sector
Thomas Dederichs, Bundesnetzagentur (on behalf of IEA-RETD)

Transportation work
Carsten Hoyer-Klick, German Aerospace Centre, Institute of Technical Thermodynamics

Status of EV and battery development
Francisco Carranza, Nissan Europe