future costs of electricity generation
Figure 6.91 shows that the introduction of renewable technologies under the Energy [R]evolution scenario significantly decreases the future costs of electricity generation compared to the Reference scenario. Because of the lower CO2 intensity of electricity generation, costs in China will become economically favourable under the Energy [R]evolution scenario and by 2050 will be almost 3 cents/kWh below those in the Reference scenario.
Under the Reference scenario, by contrast, the unchecked growth in demand, increase in fossil fuel prices and the cost of CO2 emissions result in total electricity supply costs rising from today’s $256 billion per year to more than $1,386 billion in 2050. Figure 6.91 shows that the Energy [R]evolution scenario not only complies with China’s CO2 reduction targets but also helps to stabilise energy costs. Increasing energy efficiency and shifting energy supply to renewables lead to long term costs for electricity supply that are significantly lower than in the Reference scenario.
In both Energy [R]evolution scenarios the specific generation costs are almost the same up to 2030. By 2050, however, the advanced version results in a reduction to 7 cents/kWh, mainly because of greater economies of scale in the production of renewable power equipment. Due to the increased demand for electricity, especially in the transport and industry sectors, the overall supply costs in the advanced version are $6,8 billion higher in 2030 than in the basic Energy [R]evolution scenario.