China holds lowest-cost renewable power in APAC

It overtakes India as China sees a 4% electricity cost decline in utility-scale solar.

China has the lowest-cost renewable power in the Asia Pacific in 2022 as it recorded a 4% decline in the average utility-scale solar levelised cost of electricity (LCOE) to $44 per megawatt-hour (MWh).

In a report, Wood Mackenzie said China took the spot of India which said the average LCOE for utility-scale solar by over a third to $56 per MWh.

China, India, and Australia were the only markets in the region where renewable costs are competitive against new coal power projects.

READ MORE: Construction cost, interest rates worsen RE competitiveness in APAC in 2022

“China has been insulated from cost inflation trends, gaining competitiveness against other markets due to massive scale, depth of local supply chain, and increasing technology dominance,” Alex Whitworth, Research Director at Wood Mackenzie, said. 

“Offshore wind in China is now competitive with gas and coal power in coastal regions, and a further drop in costs of nearly a quarter by 2025 will allow the technology to undercut coal power nationally,” Whitworth added.  

The cost of offshore wind in China dropped 22% to $72 per MWh in 2022, less than half the APAC average of $171 per MWh, whilst its solar and onshore wind costs remained low.