future costs of electricity generation

Figure 28 shows that the introduction of renewable technologies under the energy [r]evolution scenario will still be competitive with the costs of electricity generation in the Reference Scenario, partly because of the additional CO₂ emission costs that will be imposed on power generation from 2010 onwards. From 2020 the cost difference will increase from about 0.4 cents/kWh up to 1.8 cents/kWh in 2050. Note that any increase in fossil fuel prices beyond the projection given in Table 3 will reduce the gap between the two scenarios.

Due to growing demand, we face a significant increase in society’s expenditure on electricity supply. Under the Reference Scenario, the unchecked growth in demand, the increase in fossil fuel prices and the cost of CO2 emissions result in total electricity supply costs for North America rising from today’s $290 billion per year to more than $750 bn in 2050.

Figure 29 shows that the energy [r]evolution scenario not only complies with global 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 40% lower than in the Reference Scenario. It becomes clear that pursuing stringent environmental targets in the energy sector also pays off in terms of economics.