Renewables remained the most cost-competitive option for new electricity generation in 2024, with 91% of newly commissioned utility-scale capacity delivering power at a lower cost than the cheapest newly installed fossil fuel-based alternative, says a new report.
In 2024, new utility-scale onshore wind projects remained the cheapest source of renewable electricity, with a global weighted average levelised cost of electricity (LCOE) of $0.034/per kilowatt hour (kWh), followed by new solar photovoltaic (PV) ($0.043/kWh) and new hydropower ($0.057/kWh), said IRENA’s new report on Renewable Power Generation Costs in 2024.
In 2024, renewables helped avoid $467 billion in fossil fuel costs, reinforcing their role not only as the lowest-cost source of new power but also as a key driver of energy security, economic stability, and resilience in a volatile global energy landscape, the report said.
Between 2010 and 2024, total installed costs (TIC) declined sharply across major renewable technologies. By 2024, TIC fell to $691/kW for solar PV, $1,041/kW for onshore wind, and $2,852/kW for offshore wind.
LCOE increased slightly for some technologies over 2023: solar PV by 0.6%, onshore wind by 3%, offshore wind by 4%, and bioenergy by 13%, it noted.
Meanwhile, costs declined for CSP (-46%), geothermal (-16%), and hydropower (-2%). • Battery storage costs declined by 93% from 2010 to 2024, falling from $2,571/kWh to $192/kWh.
For onshore wind, China ($0.029/kWh) and Brazil ($0.030/kWh) recorded LCOEs below the global average, reflecting the maturity of these top markets. For solar PV, China and India reported below-average LCOEs, at $0.033/kWh and $0.038/kWh, respectively. For offshore wind, Asia’s average ($0.078/kWh) was slightly below Europe’s ($0.080/kWh).
Over the next five years, global total installed costs are expected to reach approximately $388/kW for solar PV, $861/kW for onshore wind, and $2,316/kW for offshore wind.
While long-term cost reductions are expected from continued technological learning and supply chain maturity, emerging geopolitical risks – notably trade tariffs on renewable components and materials and Chinese manufacturing sector dynamics – could raise costs in the short term, the report noted.
Financing costs remain a key determinant of renewable project viability, with capital costs shaped by factors such as revenue certainty, capital structure and macroeconomic conditions, it said.
Integrating more variable renewables into the grid may lead to higher short-term costs; but a growing number of projects are combining solar, wind, storage, and digitalisation - enhancing economic performance and facilitating integration.
RECORD FOR RENEWABLE POWER CAPACITY
In 2024, global renewable power capacity additions reached an unprecedented 582 gigawatts (GW), representing a 19.8% increase compared to the capacity additions delivered in 2023 and marking the highest annual expansion since records began in 2000.
Solar photovoltaics (PV) led this surge, accounting for 452.1 GW (77.8%) of the total, followed by wind, with 114.3 GW. These additions brought the total global installed renewable capacity to 4 443 GW by the end of the year. Capacity additions for other technologies - concentrated solar power (CSP), geothermal, bioenergy and hydropower - remained modest in 2024, collectively adding approximately 15.4 GW, up from 13.7 GW in 2023. Hydropower alone accounted for 9.3 GW. Additions for CSP and geothermal continued to stagnate, while bioenergy saw a slight increase compared to 2023.
Asia added 413.2 GW of renewable capacity – a 24.9% increase that brought the region’s total to 2 374 GW. China alone accounted for 61.2% of global PV additions (276.8 GW) and 69.4% of new wind installations (79.4 GW). Other notable contributors included the United States, India, Brazil and Germany, all of which added substantial volumes of new renewable capacity, highlighting the continued global diversification of renewable investment.
The growth in renewable power capacity additions reflects the accelerating global momentum to increase the share of renewables in electricity generation. However, current deployment levels fall short of that required to triple renewable energy capacity by 2030 – the goal set out in the First Global Stocktake, known as the “UAE Consensus”, at COP28.
Although installed capacity reached 4,443 GW in 2024, achieving the 11,000+ GW target by 2030 requires annual additions well over 1,000 GW 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. - TradeArabia News Service
