future costs of electricity generation
Figure 6.122 shows that the introduction of renewable technologies under the Energy [R]evolution Scenario slightly increases the costs of electricity generation in the OECD Pacific compared to the Reference Scenario. The difference will be less than 1.5 cents/kWh up to 2030. Because of the lower CO2 intensity, by 2020 electricity generation costs will become economically favourable under the Energy [R]evolution Scenario, and by 2050 they will be more than 4 cents/kWh below those in the Reference Scenario.
Under the Reference Scenario, by contrast, 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 $160 billion per year to more than $400 bn in 2050. Figure 6.123 shows that the Energy [R]evolution Scenario not only complies with the OECD Pacific’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.