future costs of electricity generation
Figure 6.28 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 will become economically favourable under the Energy [R]evolution scenario and by 2050 will be more than 4 cents/kWh below those in the Reference scenario.
Under the Reference scenario, on the other hand, unchecked growth in demand,an increase in fossil fuel prices and the cost o fCO2 emissions result in total electricity supply costs rising from today’s $75 billion per year to more than $260 billion in 2050. Figure 6.28 shows that the Energy [R]evolution scenario not only complies with Latin America’s CO2 reduction targets but also helps to stabilise energy costs and relieve the economic pressure on society. 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.
The advanced Energy [R]evolution scenario will lead to a higher proportion of variable power generation sources (PV, wind and ocean power), accounting for 21% by 2030. Expansion in the use of smart grids, demand side management and storage capacity through an increased share of electric vehicles will therefore be introduced to ensure better grid integration and power generation management.
In both Energy [R]evolution scenarios the specific generation costs are almost the same up to 2050. Due to the increased demand for electricity, especially in the transport and industry sectors, the overall supply costs in the advanced version are $9 billion higher in 2030 and $21 billion higher in 2050 than in the basic Energy [R]evolution scenario.