Plummeting costs of renewables - Are energy scenarios lagging?

Abstract

Wind and solar energy play a pivotal role in deep decarbonization pathways for the future. However, energy scenario studies differ substantially in the contribution of these technologies, as the technology selection in models strongly depends on the choice of techno-economic parameters. In this article, we systematically compare the cost assumptions for solar and wind technologies in global, regional and national energy scenario studies with costs observed in reality and with recent remuneration from market auctions. Specially, we compared the capital expenditure (CAPEX) and the levelized cost of electricity (LCOE) towards the year of 2050 when available with historical market prices and auction prices. Our results indicate that the trend of rapid cost declines has been structurally underestimated in virtually all future energy scenario analyses and suggest that even the most recent studies refer to obsolete or very conservative values. This leads to underestimating the future role and level of deployment of renewable technologies. We recommend an open database for costs of renewable technologies to enhance the accuracy and transparency of future energy scenarios.