Renewable energy crushes fossil fuels on cost of electricity
In 2024, onshore wind remained the most affordable source of new renewable electricity at $0.034/kWh, followed by solar PV at $0.043/kWh.
This is according to a report by the International Renewable Energy Agency (IRENA), Renewable Power Generation Costs in 2024. The report indicates that 91% of new renewable projects are now cheaper than fossil fuel alternatives.
In 2024, solar photovoltaics (PV) were, on average, 41% cheaper than the lowest-cost fossil fuel alternatives, while onshore wind projects were 53% cheaper.
“The addition of 582 gigawatts of renewable capacity in 2024 led to significant cost savings, avoiding fossil fuel use valued at about $57 billion. Notably, 91% of new renewable power projects commissioned last year were more cost-effective than any new fossil fuel alternatives,” IRENA said.
The report shows that capacity additions for other technologies—concentrated solar power (CSP), geothermal, bioenergy, and hydropower—remained modest in 2024, collectively adding approximately 15.4GW, up from 13.7GW in 2023.
“Hydropower alone accounted for 9.3GW. Additions for CSP and geothermal continued to stagnate, while bioenergy saw a slight increase compared to 2023.”
Growing share of renewable energy in electricity generation
IRENA states that renewable power capacity additions indicate a global trend towards increasing the use of renewables in energy generation. Current deployment levels are insufficient to treble renewable energy capacity by 2030, as stated in the “UAE Consensus” at COP28.
“Although installed capacity reached 4,443GW in 2024, achieving the 11,000+GW target by 2030 requires annual additions well over 1,000GW in the latter half of the decade. Meeting this goal will require not only a rapid scale-up in deployment but also substantial investment in enabling infrastructure—particularly grid expansion and energy storage,” the report said.
It indicates that battery storage, hybrid systems, and digitalisation are crucial for the energy transition and integration of variable renewables like solar PV and wind.
“Battery deployment must expand significantly to support a renewables-based power system, with storage technologies expected to provide the majority of short-duration flexibility needs. Batteries also play a central role in enabling sector coupling and electrification, contributing to emissions reductions both directly and indirectly.”
Cover photo: machthay©123rf
