Generating power from renewable energy is already cheaper on average worldwide than using fossil fuels, according to a new report.

The Carbon Tracker Initiative compared the power-generation costs of four new-build coal, gas, wind and solar plants.

Its “End of the load for coal and gas?” report applied a Levelised Cost of Electricity (LCOE) sensitivity analysis across three scenarios: the 2016 reference case scenario; an updated 2016 scenario; and a 2020 2C pathway setting, where investment decisions take into account decarbonisation trends.

The LCOE study showed that reduced load factors and shorter lifetimes for coal and gas plants during steady decarbonisation significantly undermine plant economics, the report said.

Trend likely to spread

James Leaton, Carbon Tracker’s head of research, said: “Policy-makers and investors really need to question out dated assumptions on technology costs that do not factor in the direction of travel post-Paris.

“Planning for business-as-usual load factors and lifetimes for new coal and gas plants is a recipe for stranded assets.”

Paul Dowling, co-author of the report, added: “This analysis explains why renewables are already the cheapest option in a number of markets.

“This trend is only likely to spread as the growth of renewables undermines the economics of fossil fuels.”

> Read the report's summary