In the first half of 2021, the global average onshore wind power costs have fallen. However, the rising commodity prices might make renewable energy more expensive.
If commodities such as steel and copper continue to rise, wind power prices may also rise in the second half of 2021.
In the first half of 2021, the global benchmark Levelized cost of electricity for onshore wind power fell to US$41/MWh. It is a 7% drop from a year ago and a 63% drop from 2010.
The price of solar energy fell by 16% last year.
Simultaneously, the cost of onshore wind power fell by 13% over the same period. Also, the cost of offshore wind power decreased by 9%.
If the mandatory carbon price is included, the fee of new coal-fired power plants in Europe will far exceed the cost of wind or solar power plants.
In the United States, compared with existing coal-fired power plants, the price of renewable energy may get75% to 91% cheaper. Moreover, in India, renewable energy will be 87% to 91% cheaper than new coal-fired power plants.
In the first half of 2021, onshore wind power LCOE in Brazil and Texas was the lowest at 22 USD/MWh.
The countries with the highest onshore wind power LCOE in the first six months of this year are Indonesia (US$135/MWh), South Korea (US$127/MWh), Thailand (US$124/MWh), and Japan (114 USD/MWh).
Price Pressure of Commodities
The continued rise in commodity prices in the second half of 2021 might mean that renewable energy has temporarily become more expensive for the first time in decades.
In the first six months of 2021, global steel prices doubled year-on-year, affecting the cost of wind turbines. For example, the price of wind turbines in India has risen by 5% in the past six months.
However, analysts pointed out that manufacturing makes up most of the final cost of wind turbines, solar photovoltaic modules, and battery packs.
Some developers will have long-term purchase orders, which may protect them from such increases.
Replacing active coal-fired power plants with unsubsidized renewable energy can save 32.3 billion U.S. dollars. Therefore reducing carbon dioxide emissions by 300 million tons in the energy system.