Cost Inversion of Renewables Led to Dominance in New Global Capacity (2019)
The reversal in cost rankings, which saw wind and especially solar power become the most affordable energy options, directly led to renewable sources accounting for 72% of all new additions to global power capacity in 2019.
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Source for Figure 2.23: Lazard's Levelized Cost of Energy Analysis (2019)
Cost Inversion of Renewables Led to Dominance in New Global Capacity (2019)
Analyzing Production Input Assumptions
Consider the following data on the cost of generating electricity from new power plants: In 2009, the cost per unit of electricity from solar power was the highest, followed by wind, with coal and gas being the least expensive. By 2019, this situation had reversed; the cost for solar and wind had fallen dramatically, making them the least expensive sources for new electricity generation, cheaper than new coal or gas plants. Based on this information, which of the following is the most logical economic consequence?
Evaluating Energy Investment Strategy
Energy Infrastructure Investment Decision
Energy Infrastructure Investment Decision
Consider the economic trend from 2009 to 2019, where the cost to build and operate a new solar or wind power facility dropped significantly, becoming lower than the cost to build and operate a new coal or gas power facility. Based solely on this information, it is a valid conclusion that by the end of 2019, it was more expensive to continue operating an existing, fully constructed coal plant than to replace it with a new solar facility.
In 2009, the cost of generating electricity from new power plants was highest for solar, followed by wind, with gas and coal being the least expensive. By 2019, technological advancements had dramatically lowered the cost of renewables, reversing this order. Based on this information, arrange the following energy sources from MOST expensive to LEAST expensive for building a new power plant in 2019.
Based on the major economic trends observed between 2009 and 2019, match each energy source with the description that best characterizes the change in its cost for building new electricity generation capacity.
Learn After
In 2019, a significant majority (over two-thirds) of all new electricity-generating capacity added worldwide came from renewable sources like wind and solar. Which of the following statements provides the most direct economic explanation for this investment pattern?
Energy Investment Decision Analysis
True or False: The primary driver for renewable sources making up 72% of new global power capacity in 2019 was the introduction of new, large-scale government programs that made it cheaper for consumers to purchase electricity from renewable sources.
Explaining the 2019 Shift in Energy Investment
An energy market commentator made the following claim regarding 2019's global energy investments: "The fact that renewable sources accounted for 72% of new power capacity is clear evidence that governments must have introduced massive new subsidies to make these projects artificially attractive to investors." Which of the following statements provides the most accurate economic evaluation of this claim?
Economic Drivers of 2019 Energy Investments
True or False: The observation that renewable sources accounted for 72% of all new power capacity added globally in 2019 indicates that the total amount of electricity-generating capacity from renewables exceeded the total capacity from fossil fuels for the first time that year.
Mechanism of the 2019 Energy Shift
National Energy Strategy Evaluation
Match each economic phenomenon with its role in the 2019 global energy market, a year when renewable sources represented 72% of all new electricity-generating capacity added worldwide.