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Lowered costs ensure broad use of renewables

The cost of electricity from renewables has fallen massively since 2010, whereas the cost for fossil fuels has kept rising. This is shown clearly by the IRENA report Renewable Power Generation Costs in 2023.

A report by the International Renewable Energy Agency (IRENA) shows that the record growth of renewables capacity in recent years has significantly increased their cost benefit across the world. In 2023, 81% of the newly installed 473 gigawatts of renewables capacity was able to operate at a lower cost than their fossil alternatives. This underlines how economically attractive it is to triple the renewables capacity by 2030.

Decades of falling costs and technological progress have rendered renewables attractive not only ecologically, but also economically. Across the world, rising prices for fossil fuels increase the competitive advantage that renewables already possess.

^{Cost of electricity from renewables has fallen drastically since 2010}

The cost of electricity from renewables fell steeply between 2010 and 2023. According to the IRENA report, electricity from PV became 90% cheaper during that time, whilst onshore wind energy and solar thermal energy became 70% less expensive and the price tag on offshore wind energy fell by 63%. In 2023 alone, prices fell 12% for photovoltaics, 3% for onshore wind, 4% for solar thermal energy and 7% for offshore wind.

Said Francesco La Camera, Director-General of IRENA: “Low-cost renewables represent a key incentive to significantly increase ambition and triple renewable power capacity by 2030, as modelled by IRENA and set by the UAE Consensus at COP28.”

To triple electricity generation from renewables by 2030, the global capacities must rise to 11.2 terawatts, requiring an average annual addition of 1,044 gigawatts.

^{Significant growth expected for all types of renewables}

Stated Francesco La Camera: “In the coming years, remarkable growth across all renewable energy sources is expected [...]. Solar PV and onshore wind will have the biggest impacts on the tripling of renewables.”

The low cost for renewable energy presents an opportunity for the world to reduce its dependency on fossil fuels, to limit damage caused by CO₂ emissions, to foster economic development and to strengthen energy security. Renewables have become the low-cost standard solution for new electricity generation facilities. Now it is time to adjust policies, market structures and funding instruments in line with the target of tripling capacity.
The full report Renewable Power Generation Costs in 2023 can be found here.