Solar energy projects will be effectively competing with gas in the next six years. With more investments gracing the renewable energy industry, energy will reduce in cost by 23%, surpassing the cost of coal power. Currently, the cost of renewable energy exceeds coal energy by 16%, although it received discounts compared to gas power plants last year. In 2030, the renewable energy industry in India and Australia will grow to 56% and become less expensive than coal energy projects. India will witness reduced costs of renewable energy because the development costs are low for renewable resources. The potential of renewables performing excellently in the country is tapping more investments making the competition to enter this industry to be intense. In China and Australia, solar costs appear to be slightly equal though the Australian market has the best performing solar installation resources.
On the other hand, CAPEX is more affordable in the China market than the Australian one. Nevertheless, the premiums for developing renewables are relatively expensive in China because of the reduced coal LCOE. The South Korean, Thailand, and Vietnam markets will be heading to where China is operating at since the cost of renewable energy is reducing at a fast rate than that for coal going through next year. Wood Mackenzie anticipates the carbon price to affect the LCOE of coal and gas in the Asian continent. Carbon costs are raising the LCOE to increase by 4% for the coal and gas and will likely surpass 8% by the end of this decade. Elsewhere, the Japanese market is operating at contrary rates. The country is known for having the most expensive renewable energy prices this year, although experts think this market will witness a 1% discount favoring it over fossil fuels by the end of this decade. This high cost for renewables in Japan is because they factor in the labor, environmental permit, natural problems, and the scarcity of renewable energy resources.
South Korea and Taiwan will record the renewable energy industry operate at 30% more affordability than fossil fuels before 2030. The senior analyst of Wood Mackenzie, Rishab Shrestha, outlined that India and Australia are the only markets in which the renewables are operating at an advantage compared to the newly developed coal-firing power plants. Nevertheless, all the markets will be aligning themselves towards the development of renewables to minimize the emissions that result in global warming. Moreover, government policies will be instrumental in realizing affordable prices for renewable energy resources.