future costs of electricity generation

Figure 28 shows that the introduction of renewable technologies under the energy [r]evolution scenario will by 2010 already be reducing the cost of electricity generation compared to the reference scenario. Once the cost of CO₂ emissions has been taken into account from 2020 onwards, the cost difference will be about 1 cent/kWh, increasing to almost 2 cents/kWh in 2050. Note that any increase in fossil fuel prices beyond the projection given in Table 3 is a further burden on fossil fuel generation and therefore increases the gap between the two scenarios.

Due to growing demand, the India region will face a significant increase in its 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 rising from today’s $50 billion per year to more than $400 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 35% 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.