Renewable energy continues to outperform fossil fuels in cost-competitiveness, according to a new report by the International Renewable Energy Agency (IRENA). Despite fossil fuel prices returning to more typical levels, renewables made up 81% of the 473GW of new global utility-scale capacity added in 2023, with 382GW of these projects being more cost-effective than fossil fuel-fired alternatives.
The findings were released in IRENA's Renewable Power Generation Costs in 2023 report, unveiled during the Global Renewables Summit at the UN General Assembly. The report highlights the substantial decline in solar costs, which reached around four US cents per kilowatt hour in 2023—a 56% reduction compared to fossil fuel and nuclear options.
Since 2000, the deployment of renewable power globally has saved up to $409 billion in fuel costs. IRENA's Director-General, Francesco La Camera, emphasized the continuing competitiveness of renewable energy. “Renewable power remains cost-competitive vis-a-vis fossil fuels,” he said. “The virtuous cycle of long-term support policies has accelerated renewables. In return, growth has led to technology improvements and cost reductions.”
La Camera further stressed that the affordability of renewables removes any barriers to adoption: “Prices for renewables are no excuse anymore, on the contrary.” He cited the record growth of renewables in 2023 as evidence, noting that low-cost renewable energy is a critical driver for increasing global capacity, in line with IRENA's projections and the UAE Consensus from COP28.
In 2023, the global weighted average cost of electricity from new renewable projects declined across various technologies, with solar PV costs dropping by 12%, onshore wind by 3%, offshore wind by 7%, concentrating solar power by 4%, and hydropower by 7%.
The report highlights the economic advantages of renewable energy, particularly in non-OECD countries with growing electricity demand. In regions like Asia, which saved $212 billion between 2000 and 2010, renewable power is set to play a significant role in reducing electricity system costs and supporting energy security.
La Camera noted that future growth in renewable energy, particularly from solar PV and onshore wind, offers countries significant economic opportunities while reducing reliance on carbon-intensive energy sources.
