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Wärtsilä report finds accelerated adoption of renewables can reduce electricity production costs by up to 50%

The technology group Wärtsilä has issued a report ahead of COP26, the UN’s Climate Change Conference to be held in Glasgow this autumn, describing the environmental and economic opportunities for states that decarbonize rapidly.

The Front-Loading Net Zero report states that electricity production costs could be reduced by up to 50% by 2050 if countries and states adopt 100% renewable systems faster than currently planned. Significant cost reductions can be achieved by front-loading the deployment of renewables, mainly wind and solar photovoltaic, and by utilizing the technologies needed to balance their inherent intermittency, such as energy storage and thermal balancing power plants.


The report recommends five key steps for front-loading net-zero:

  1. Build conditions that enable additions of renewable electric- ity sources as quickly as possible. As the investments start to flow in, power producers will see the running hours of their inflexible, legacy power plants decrease.

  2. Build conditions that enable investments in energy storage and thermal balancing power plants; plants that can quickly start up and shut down as needed to balance renewable energy output efficiently. As utilities do this, the mindset of energy leaders will change. The role of fuel-burning power plants will change from ‘baseload’ to balancing, while renewables and energy storage become the primary sources of output to the system.

  3. Once there is sufficient renewable output, battery storage and thermal balancing power plant capacity in the system, retire legacy inflexible plants, such as coal. It is crucial to have the capacity online before the retirements to ensure reliability and to avoid blackouts once the legacy plants leave the system. Utilities should keep repeating steps 1 - 3 until their systems run on 80 – 90% renewables.

  4. To reach a 100% share of renewable power, leaders must create the conditions to build new Power-to-X capacity for sustainable fuel production and convert thermal balancing power plants to run on that fuel. This provides economic long-term energy storage, ensuring security of supply even during extreme weather conditions.

  5. Remaining fossil fuel capacity can then be rapidly phased-out, if it has not already been retired.

The report says that carbon neutral systems can provide cheaper electricity compared to current fossil-fuel-based systems.

The report models Germany, India, and California—three markets with vastly different socio-economic dynamics, energy systems, and challenges—describing the cost-optimal path towards 100% renewable power systems in each region.

The report says that by accelerating 100% renewable power systems, substantial benefits are unlocked:

  • Accelerating renewables to become main source of electricity drives down fossil fuel usage (i.e. coal and gas), significantly reducing the overall levelised cost of electricity. India can halve its electricity costs by 2050, while California and Germany can cut costs by 17% and 8% by 2040 respectively.

  • Coal-fired power—70% of generation in India and 33% in Germany—can be securely replaced by renewables and flexibility from energy storage and thermal balancing power plants as early as 2040.

  • Major carbon savings can be made in the short term, enabling national climate targets to be achieved. Germany can avoid 422 million tonnes of carbon dioxide by 2040 by accelerating its coal phase-out. This would help achieve its 65% reduction target (compared to 1990 levels) set for 2030.

  • Renewables as the main source of primary energy for electricity generation can drive energy independence. For example, Germany could avoid the need to import 550 TWh of power by accelerating the phase-out of coal.

The report comes at a time when demand for coal and natural gas is exceeding pre-COVID-19 levels, with oil demand also gaining rapidly, according to Reuters.

Today’s situation is a reminder to governments, especially as we seek to accelerate clean energy transitions, of the importance of secure and affordable energy supplies—particularly for the most vulnerable people in our societies. Well-managed clean energy transitions are a solution to the issues that we are seeing in gas and electricity markets today—not the cause of them.

— IEA Executive Director Fatih Birol

The clear, deliverable pathways to 100% renewables modeled in these different energy systems in the report show that affordable net-zero economies are in reach for every country at COP26. In addition to the deep-dive models, the report’s chapters focusing on Australia, Chile and the UK’s energy transitions underline that the technologies needed to achieve 100% renewable power systems are already available at scale around the world.

The report shows the once-in-a-generation opportunity to scale-up renewable generation and energy storage to bridge the gap to 100% renewable electricity without adding to the cost of power.

As we approach COP26, our ‘Front-Loading Net Zero’ report should act as a wake-up call for leaders, as this is our last and best chance to get countries on pathways to carbon neutrality. Our modeling shows that it is viable for energy systems to be fully decarbonized before 2050, and that accelerating the shift to renewable power coupled with flexibility, will help economies to thrive. We have all the technologies that we need to rapidly shift to net zero energy. The benefits of renewable-led systems are cumulative and self-reinforcing—the more we have, the greater the benefits—so it is vital that leaders and power producers come together now to front-load net zero this decade.

—Wärtsilä’s President & CEO, Håkan Agnevall

There is no single solution that fits all markets, and this report highlights the different paths and technologies that can be utilized. The ultimate aim, however, is common to all and that is to decarbonize energy production and take the fullest advantage of our natural energy sources.

—Sushil Purohit, President, Wärtsilä Energy and EVP, Wärtsilä



From the report it is plain that in all regions it is essential to provide substantial storage capacity to enable high to 100% renewables and that that means hydrogen and its derivatives such as methanol/ammonia.

I am entirely unable to understand how those who oppose the utilization of hydrogen for that purpose imagine that decarbonization is possible.

Even for some future where the political obstacles to, say, SMR nuclear reactors are cleared away and they basically power society, the economics are way better if during slack times surplus power is turned into hydrogen for transport etc.

And it is renewables which are now dirt cheap, not as yet unapproved new reactors, and that is what can now be built out for comparable or cheaper cost than fossil fuels.

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