global: future costs of electricity generation
Figure 5.7 shows that the introduction of renewable technologies under the Energy [R]evolution scenario slightly increases the costs of electricity generation compared to the Reference scenario. This difference will be less than $ 0.6 cent/kWh up to 2020. Any increase in fossil fuel prices beyond the projection given in table 4.3, however, will reduce the gap. Because of the lower CO2 intensity of electricity generation, electricity generation costs will become economically favourable under the Energy [R]evolution scenario and by 2050 costs will be $ 7.9 cents/kWh below those in the Reference version.
Under the Reference scenario, the unchecked growth in demand, an increase in fossil fuel prices and the cost of CO2 emissions result in total electricity supply costs rising from today’s $ 2,364 billion per year to about $ 8,830 billion in 2050. Figure 5.7 shows that the Energy [R]evolution scenario not only complies with CO2 reduction targets but also helps to stabilise energy costs. Increasing energy efficiency and shifting energy supply to enewables lead to long term costs for electricity supply that are 22% lower in 2050 than in the Reference scenario (including estimated costs for efficiency measures up to $ 4 ct/kWh).