Clean energy surge cuts costs of new project and boosts global energy security

In a dramatic shift that underscores a global energy transformation, renewable power projects have decisively outpaced fossil fuels in cost competitiveness, according to a new report from the International Renewable Energy Agency (IRENA).

Data for 2024 reveals that 91 per cent of all new utility-scale renewable energy capacity delivered power at a lower cost than the cheapest new fossil fuel-fired alternative, a turning point for global energy economics.

The global weighted average levelised cost of electricity (LCOE) for onshore wind fell to $0.034 per kilowatt hour (kWh), making it the world’s cheapest source of new power.

Solar photovoltaics followed closely at $0.043/kWh, while hydropower settled at $0.057/kWh.

These price points, achieved despite slight year-on-year increases in some segments, signal the deep maturity of renewables across key markets, with China and Brazil registering even lower averages for wind and solar.

From 2010 to 2024, installed costs for key renewables plummeted by 87 per cent for battery storage alone, while the outlook through 2030 suggests further declines, particularly for solar PV and onshore wind.

Much of this progress is driven by a combination of technological innovation, streamlined manufacturing processes, and economies of scale in deployment.

Rapid growth in emerging markets, bolstered by supportive policies and falling hardware costs, is accelerating adoption and making clean energy more accessible.

Even in regions historically dependent on fossil fuels, renewables are gaining traction as both an economic and environmental imperative.

Still, cost trends remain vulnerable to supply chain pressures, interest rate fluctuations, and raw material pricing, all of which could shape short-term investment decisions and long-term policy strategies.

However, the report warns of potential short-term volatility due to geopolitical disruptions, such as trade barriers and shifting dynamics in China’s manufacturing sector.

In 2024 alone, renewables helped avert an estimated $467 billion in fossil fuel expenditures; a staggering figure that highlights not only their economic edge but also their role in bolstering energy security and climate resilience.

Although integrating variable renewables presents grid challenges, innovations combining solar, wind, storage and digital controls are already smoothing the path forward.

BY Abdulaziz Khattak