future costs of electricity generation
Figure 5.49 shows that the introduction of renewable technologies under the Energy [R]evolution scenario slightly increases the costs of electricity generation in OECD Europe compared to the Reference scenario. This difference will be less than $ 1.3 cent/kWh up to 2020, however. Because of the lower CO2 intensity of electricity generation, electricity generation costs will become economically favourable under the Energy [R]evolution scenario and by 2050 costs will be $ 6.2 cents/kWh below those in the Reference version.
Under the Reference scenario, the 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 $ 426 billion per year to more than $ 832 billion in 2050. Figure 5.49 shows that the Energy [R]evolution scenario not only complies with OECD Europe’s CO2 reduction targets but also helps to stabilise energy costs. Increasing energy efficiency and shifting energy supply to renewables lead to long term costs for electricity supply that are 18% lower than in the Reference scenario, although costs for efficiency measures of up to $ 4 cents/kWh are taken into account.