The majority of newly commissioned renewable energy projects are more cost-effective than fossil fuel alternatives, according to a new report published Tuesday by the International Renewable Energy Agency (IRENA).
In 2023, 582 gigawatts of new renewable capacity—including hydropower, solar, wind, and geothermal—were added globally, marking a nearly 20% increase from the previous year. Of these, around 91% of utility-scale projects were found to be more economical than fossil fuel-based power generation.
Solar photovoltaic (PV) projects were, on average, 41% cheaper than the lowest-cost fossil fuel alternatives, such as gas, while onshore wind proved 53% cheaper. The report also highlighted a 93% drop in the cost of battery energy storage systems since 2010.
The findings come in the wake of global commitments made at the COP28 UN climate summit, where nations agreed to triple renewable energy capacity by 2030 in an effort to keep global warming within the 1.5°C limit.
“Looking at all renewables currently in operation, the avoided fossil fuel costs in 2024 reached up to $467 billion,” said Francesco La Camera, Director General of IRENA. “New renewable power outcompetes fossil fuels on cost, offering a clear path to affordable, secure, and sustainable energy.”
While renewable energy costs have steadily declined over the past decade thanks to technological advancements and economies of scale, IRENA warned that ongoing geopolitical tensions, trade barriers, and material supply chain constraints could disrupt further progress and temporarily drive up costs.
“This progress is not guaranteed,” La Camera added. “Rising geopolitical tensions, trade tariffs, and material supply constraints threaten to slow the momentum and drive up costs.”
