future costs of electricity generation
Figure 6.46 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, electricity generation costs will become economically favourable under the Energy [R]evolution scenario by 2020, and by 2050 costs will be more than 6 cents/kWh below those in the Reference scenario.
Under the Reference scenario, by contrast, unchecked demand growth, an increase in fossil fuel prices and the cost of CO2 emissions result in total electricity supply costs rising from today’s $59 billion per year to more than $268 billion in 2050. Figure 6.46 shows that the Energy [R]evolution scenario not only complies with Africa ́s CO2 reduction targets but also helps to stabilise energy costs. Increasing energy efficiency and shifting energy supply to renewables leads to long term costs for electricity supply that are one third lower than in the Reference scenario.
In both Energy [R]evolution scenarios the specific generation costs are almost the same up to 2030. In 2050, however, the advanced version results in a reduction of 2 cents/kWh, mainly because of better economics of scale in renewable power equipment.
Due to the increased demand for electricity, especially in the transport and industry sector, the overall supply costs in the advanced version are $2 billion higher in 2030 than in the basic Energy [R]evolution scenario, however in 2050 they are $27 billion lower in the advanced scenario.