Based on both Energy [R]evolution Scenarios for developing (non-OECD) countries, a calculation has been done to estimate the costs and benefits of an FTSM program using the following assumptions.
Power generation costs
The average level of feed-in tariffs, excluding solar, has been calculated on the assumption that the majority of renewable energy sources require support payments of between 7 and 15 cents per kilowatt-hour . While wind and bio energy power generation can operate on tariffs of below 10 cents per kWh, other technologies, such as geothermal and concentrated solar power , will need slightly more. Exact tariffs should be calculated on the basis of specific market prices within each country.
Specific CO2 reduction per kWh
The assumed CO2 reduction perkWh from switching to renewables is crucial for calculating the specific cost per tonne of CO2 saved. In non-OECD countries the current level of CO2 emissions for power generation averages 871 gCO2 /kWh, and will reduce to 857 gCO2 /kWh by 2030 (see Reference scenario Chapter 6). The average level of CO2 emissions over the period from 2010 to 2020 is therefore 864 gCO2 /kWh.
Click to view large image
From the beginning of the financial crisis in mid-2008 it became clear that inflation rates and capital costs were likely to change very fast. The cost calculations in this program do not take into account changes in interest rates, capital costs or inflation; all cost parameters are nominal based on 2009 levels.
The FTSM program would cover 624TWh by 2015 and 4,960 TWh by 2030 of new renewable electricity generation and save 77.6 GtCO2 between 2010 and 2030. This works out at 3.8 GtCO2 per year under the basic Energy [R]evolution scenario and 82 GtCO2 or 4.1 GtCO2 per year under the advanced version. With an average CO2 price of $23.1 per tonne, the total program would cost $1.62 trillion. This works out at $76.3 billion annually under the basic version and $1.29 trillion or $61.4 billion annually under the advanced scenario.