Almost all renewable power projects worldwide now cost less than traditional fossil fuel energy sources.
In a significant shift for the global energy sector, renewable energy has emerged as the default economic choice for new power generation in most parts of the world. According to a report published by the International Renewable Energy Agency (IRENA), 91% of newly commissioned utility-scale renewable capacity delivered power at a lower cost than the cheapest new fossil fuel-based alternative in 2023 [1].
The transformation is driven by a dramatic decline in the Levelized Cost of Energy (LCOE) for renewable energy sources over the past decade. The IRENA report shows that the global average LCOE for onshore wind is $0.034/kWh, making it the most affordable source of new electricity worldwide [2]. Utility-scale solar photovoltaics (PV) follow closely behind at $0.043/kWh, with new hydropower at $0.057/kWh. In contrast, the unsubsidized LCOE for new gas combined cycle plants ranges from $0.045 to $0.115/kWh [2].
The cost reductions in renewable energy are primarily due to advancements in technology and economies of scale. Over 90% of global renewable power projects are now cheaper than fossil fuels [2]. While hydropower remains more expensive than wind and solar, its costs have also decreased, though not as dramatically.
The new economic reality is that the overwhelming majority of new renewable power projects are now cheaper than their new fossil fuel counterparts. This shift is significant, as it challenges the traditional reliance on fossil fuels and underscores the economic viability of renewable energy.
The UN Secretary-General, António Guterres, has emphasised that the shift to renewable energy is about economic sense and national security. Fossil fuel prices and demand are volatile and unpredictable, making countries vulnerable to geopolitical turmoil. Guterres stated, "We have passed the point of no return from fossil fuels and are on the cusp of a new era of clean energy" [3].
However, the move towards renewable energy is not without challenges. Most resource-rich locations for solar and wind are often far from cities and industrial centers, making transmission of electricity challenging. Renewable energy grids need batteries to truly take off and become more efficient. The cost of utility-scale battery energy storage has plummeted by 93% since 2010 [2].
In 2024, a record 582 gigawatts (GW) of new renewable capacity was added globally, a nearly 20% increase over the previous year [4]. This growth is expected to continue, with the most rapid growth and highest returns in the coming decade likely to be in the technologies that enable the renewable transition.
The UN Secretary-General, António Guterres, also stated that the greatest threat to energy security today is fossil fuels, as they leave economies and people at the mercy of price shocks, supply disruptions, and geopolitical turmoil [5]. He warned that air pollution from burning fossil fuels kills over 7 million people [6].
As the world moves towards a cleaner and more sustainable energy future, the focus will shift beyond LCOE to consider system-wide factors such as grid integration and reliability. This shift reflects the increasing importance of these factors in ensuring a reliable and resilient energy supply.
References: [1] IRENA (2023). "Renewable Power Costs in 2023." [Online]. Available: https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2023/Mar/IRENA_REsource_2023_Executive_Summary.pdf [2] IRENA (2025). "Global Renewable Energy Capacity Statistics 2025." [Online]. Available: https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2025/Jun/IRENA_REsource_2025_Executive_Summary.pdf [3] UN Secretary-General António Guterres (2022). "Address to the High-Level Dialogue on Energy." [Online]. Available: https://www.un.org/sg/en/content/sg/speeches/2022-10-18/address-high-level-dialogue-energy [4] IEA (2025). "Renewable Capacity Statistics 2025." [Online]. Available: https://www.iea.org/reports/renewable-capacity-statistics-2025 [5] UN Secretary-General António Guterres (2022). "Address to the High-Level Dialogue on Energy." [Online]. Available: https://www.un.org/sg/en/content/sg/speeches/2022-10-18/address-high-level-dialogue-energy [6] WHO (2021). "Air Pollution and Health." [Online]. Available: https://www.who.int/news-room/fact-sheets/detail/air-pollution-and-health
- The dramatic decline in the Levelized Cost of Energy (LCOE) for renewable energy sources has made them the most affordable source of new electricity worldwide, with onshore wind costing $0.034/kWh and utility-scale solar photovoltaics (PV) at $0.043/kWh.
- The shift towards renewable energy is driven by advancements in technology and economies of scale, with 91% of global renewable power projects now cheaper than fossil fuels.
- Utility-scale battery energy storage costs have plummeted by 93% since 2010, making renewable energy grids more efficient and feasible.
- The UN Secretary-General, António Guterres, has emphasized that the transition to renewable energy is about economic sense and national security, as it reduces countries' vulnerability to geopolitical turmoil and price shocks.
- Climate change and health concerns are also driving the shift towards renewable energy, as air pollution from burning fossil fuels kills over 7 million people annually.
- In 2024, a record 582 gigawatts (GW) of new renewable capacity was added globally, indicating that the growth in renewable energy is expected to continue, especially in technologies that enable a renewable transition.
- As the world moves towards a cleaner and more sustainable energy future, system-wide factors such as grid integration and reliability will become increasingly important in ensuring a reliable and resilient energy supply.
- The evolution of the energy sector is intertwined with tech innovation, economics, and science, with the finance and industry sectors playing crucial roles in the transition to renewable energy, contributing to a more ecologically balanced and healthy environment for both humans and animals.
