Renewables Maintain Cost Leadership in Global Power Markets, IRENA Report Confirms

Strategic Insights -

Renewable power generation continues to outcompete fossil fuels on cost, with a new report from the International Renewable Energy Agency (IRENA) confirming that renewables maintained their price advantage in 2024. The report highlights the significant cost savings achieved through the addition of 582 gigawatts of renewable capacity, which avoided fossil fuel use valued at about USD 57 billion. Onshore wind and solar photovoltaics (PV) remain the most affordable sources of new renewable electricity, with costs of USD 0.034/kWh and USD 0.043/kWh, respectively.

Key Takeaways:

  • Renewables maintained their price advantage over fossil fuels in 2024, with cost declines driven by technological innovation, competitive supply chains, and economies of scale.
  • Solar PV was 41% cheaper than the lowest-cost fossil fuel alternatives, while onshore wind projects were 53% cheaper.
  • Onshore wind remained the most affordable source of new renewable electricity at USD 0.034/kWh, followed by solar PV at USD 0.043/kWh.
  • The addition of 582 gigawatts of renewable capacity in 2024 led to significant cost savings, avoiding fossil fuel use valued at about USD 57 billion.
  • 91% of new renewable power projects commissioned last year were more cost-effective than any new fossil fuel alternatives.
  • Renewables are not only cost-competitive vis-a-vis fossil fuels but are advantageous by limiting dependence on international fuel markets and improving energy security.
  • The business case for renewables is now stronger than ever, but continued cost reductions are expected as technologies mature and supply chains strengthen.
  • Geopolitical shifts, trade tariffs, and raw material bottlenecks pose risks that could temporarily raise costs, particularly in regions like Europe and North America.
  • Regions like Asia, Africa, and South America, with stronger learning rates and high renewable potential, could see pronounced cost declines.
  • The transition to renewables is irreversible, but its pace and fairness depend on the choices made today, with international cooperation, secure supply chains, and stable policy frameworks essential to safeguard gains.
  • Francesco La Camera, Director-General of IRENA, stresses that the cost-competitiveness of renewables is today's reality, with avoided fossil fuel costs in 2024 reaching up to USD 467 billion.

Statistics:

  • Renewables accounted for 32% of global power capacity added in 2024, with 91% of new renewable power projects being more cost-effective than any new fossil fuel alternatives.
  • Onshore wind remained the most affordable source of new renewable electricity at USD 0.034/kWh, while solar PV was USD 0.043/kWh.
  • The addition of 582 gigawatts of renewable capacity in 2024 led to significant cost savings, avoiding fossil fuel use valued at about USD 57 billion.
  • Renewables avoided fossil fuel costs of up to USD 467 billion in 2024.
  • The cost of battery energy storage systems (BESS) has declined by 93% since 2010, reaching USD 192/kWh for utility-scale systems in 2024.

Sources:

  • International Renewable Energy Agency (IRENA). (2024). Renewable Power Generation Costs in 2024.
  • United Nations Secretary-General Antonio Guterres. (2024).
  • Francesco La Camera, Director-General, IRENA. (2024).