NEW DELHI: India has emerged as the market leader with the lowest renewable energy cost in Asia Pacific, according to a report by research and consultancy firm Wood Mackenzie.
According to the report, India's levelised cost of electricity (LCOE) using solar photovoltaic has fallen to USD 38 per megawatt hour (MWh) this year, 14 per cent cheaper than coal-fired power.
LCOE represents the average revenue per unit of electricity generated that would be required to recover the costs of building and operating a generating plant during an assumed financial life and duty cycle.
Wood Mackenzie research director Alex Whitworth said India is the second-largest power market in Asia Pacific with installed power capacity of 421 gigawatts (GW) and solar capacity in the country is expected to reach 38 GW this year.
High-quality solar resources, market scale and competition have pushed solar costs down to half the level seen in many other Asia Pacific countries, he added.
The report further said Australia will see solar costs which are already competitive against gas power - breaking through the coal-fired power price barrier.
"Solar LCOE has fallen 42 per cent in the past three years and will reach USD 48/MWh in 2020, beating out all fossil fuel competitors," it said.
The report said while solar costs are falling across the region, the average LCOE for wind and solar in Asia Pacific is still 29 per cent higher than coal-fired power.
By 2030, the report said, renewable power will have a discount to coal-fired power of around 17 per cent on average across the region.
Malaysia, Indonesia and Japan will be the only countries with higher renewable LCOE compared to coal.
"We are living through a revolution in the costs of renewable power technology. Lower costs will boost wind and solar generation's share of the power mix from the current 6 per cent to a much higher level in coming years. This will create both opportunities and disruption in the industry," Whitworth said.