MENA Newswire News Desk: A recent report by the International Renewable Energy Agency (IRENA) reveals that 81% of the renewable energy capacity added in 2023 outperformed fossil fuel alternatives in terms of cost, continuing to demonstrate the economic viability of renewables. Released during the Global Renewables Summit at the UN General Assembly in New York, the report titled Renewable Power Generation Costs in 2023 highlighted how advancements in solar and wind technologies have led to significant cost reductions.
Of the record 473 gigawatts (GW) of renewable energy capacity installed in 2023, 382 GW were from utility-scale projects with lower costs than fossil fuel-fired power plants. These findings reflect decades of declining costs, particularly for solar and wind energy, which now offer substantial socio-economic and environmental benefits. The report shows that the cost of solar photovoltaic (PV) technology dropped to around four US cents per kilowatt hour, making it 56% cheaper than fossil fuels and nuclear options in 2023.
According to IRENA’s Director-General, Francesco La Camera, renewable energy has reached a point where it remains cost-competitive with fossil fuels, driven by long-term policy support and rapid technological improvements. He emphasized that the remarkable growth in 2023 should motivate global efforts to triple renewable power capacity by 2030, a target set by the UAE Consensus at COP28.
To achieve this tripling, global renewable energy capacity must reach 11.2 terawatts (TW) by 2030, adding approximately 1,044 GW annually. IRENA’s World Energy Transitions Outlook projects that 8.5 TW of this new capacity will come from solar PV and onshore wind alone. Critical enablers of this energy transition, such as energy storage, have also seen significant cost reductions, with storage project costs dropping by 89% between 2010 and 2023.
Francesco La Camera noted that this growth presents economic opportunities for countries globally. Low-cost renewable energy provides an immediate solution for reducing reliance on fossil fuels, mitigating the economic and social damage caused by carbon-intensive energy, and enhancing energy security. The analysis points to solar PV and onshore wind as the key drivers of this transition. In 2023, the global weighted average cost of electricity from newly commissioned renewable projects continued to fall across various technologies: solar PV saw a 12% decrease, onshore wind dropped by 3%, offshore wind by 7%, concentrating solar power (CSP) by 4%, and hydropower by 7%.
This downward trend in costs is particularly impactful for non-OECD economies, where electricity demand is rising, making renewable projects more attractive than fossil fuel counterparts. Asia led the world in cumulative cost savings between 2000 and 2023, with $212 billion saved, followed by Europe at $88 billion, and South America at $53 billion. The report concludes that renewable energy is now the least-cost source of new power generation, and policymakers should focus on aligning policies, market structures, and financing mechanisms to meet the ambitious renewable energy targets.