The cost of electricity from alternative sources for the year 2022

The rise in prices for fossil fuels in 2022 led to an increase in savings due to reduced demand for such types of fuel. According to expert estimates, the global savings from using alternative energy sources amounted to about $521 billion USD. Asia was the leader in savings with $199 billion USD and Europe — $176 billion USD. The smallest values were recorded in Central American countries and the Caribbean region — around $3 billion USD. In terms of renewable energy sources, onshore wind power generation and hydroelectricity made the largest contributions: 189 and 136 billion dollars USD respectively.

Wind Energy

From 2021 to 2022, the world average cost of electricity from new offshore wind farms decreased by 5% – from $0.035 USD/kWh to $0.033 USD/kWh. During this period, China took first place in terms of capacity put into operation (the share was about 50%). The reduction in costs in onshore wind energy was due to two key factors: the decrease in prices for wind turbines and an increase in utilization rates through technological improvements. From 2010 to 2022, prices for wind turbines outside of China fell by 39-55% depending on the manufacturer, while in China the price decreased almost two-thirds – by 64%. The world average utilization factor for new projects put into operation increased from 27% in 2010 to 39% in 2021. Then in 2022 this indicator dropped to 37% due to the increase in China's share, where wind potential overall is lower.

Solar Energy

From 2021 to 2022, the world average cost of electricity from new industrial solar photovoltaic systems decreased by 3% to $0.049 USD/kWh. This was due to a decrease in the global weighted unit construction cost for this technology with $917 per kilowatt in 2021 down to $876 per kilowatt for projects realized in 2022. The LCOE reduction in 2022 was less than in 2021, when the annual decrease was 13%. The drop in the global weighted average cost of electricity generated by new industrial solar photovoltaic systems in 2022 was largely due to an increase in China's share (45%) with lower costs compared to most markets.

Hydropower

Between 2010 and 2022, the global weighted LCOE of newly implemented hydroelectric projects increased by 47% – from $0.042/kWh to $0.061/kWh. This figure was still lower than the cheapest new variant of electricity generation based on fossil fuels in 2022, despite the fact that the global weighted cost increased by 18% that year. The increase in 2022 compared to 2021 was due to the commissioning of several projects where there was a significant overspend of funds, especially in Canada.

You can read data on the cost of electricity production for previous periods here: for photovoltaic stations, for onshore wind energy and for offshore wind energy.