"United Nations Secretary-General António Guterres Declares Non-reversible Energy Transition"
Renewable Energy Takes the Lead in Cost Competitiveness Over Fossil Fuels
In a significant shift for the global energy sector, renewable energy sources have become more cost-competitive than fossil fuels, according to recent reports. This trend is driven by technological innovation, competitive supply chains, economies of scale, and declining costs of associated technologies like battery storage.
The International Energy Agency (IEA) reported that clean energy drew $800 billion more investment than fossil fuels in 2024. This investment surge has led to substantial cost reductions, making renewables substantially cheaper in many cases.
Technological Advances Drive Down Costs
Advances in renewable technologies, such as solar photovoltaic (PV) and onshore wind, have reduced the levelized cost of electricity (LCOE) dramatically. Onshore wind projects in 2024 averaged about USD 0.034 per kWh, 53% cheaper than the lowest-cost fossil fuel alternatives, while solar PV was 41% cheaper at USD 0.043 per kWh.
Economies of Scale Lower Costs
The rapid expansion in installation capacity globally has also lowered costs. In 2024 alone, 582 gigawatts of new renewable capacity were added, enabling cost savings and further scale benefits.
Competitive Supply Chains Reduce Prices
The growth in global manufacturing capacity, particularly for solar PV and wind turbines, has strengthened the market and reduced prices. However, geopolitical tensions and tariffs can temporarily disrupt supply chains and impact costs.
Declining Battery Energy Storage System Costs
The decline in battery energy storage system costs is another critical factor. Battery storage improves the reliability and integration of variable renewable sources, enhancing their economic attractiveness. The cost of battery storage has dropped 93% since 2010, down to about USD 192 per kWh in 2024.
Improved Energy Security
Renewables provide improved energy security by reducing dependence on volatile international fossil fuel markets, adding economic and strategic value beyond pure generation costs.
Long-Term Trend of Declining Renewable Costs
The cost competitiveness of renewables is also supported by the long-term trend of declining renewable costs — utility-scale solar PV costs fell by 80–90% each decade since 1960 — contrasted with volatile and non-declining fossil fuel prices.
These factors combined mean that 91% of new utility-scale renewable energy projects commissioned in 2024 are cheaper than any new fossil fuel alternatives, signaling a global shift in the economics of power generation.
Renewables Replace Polluting Power Sources
Wind power and solar power help replace polluting power sources like coal and oil, keeping millions of tons of carbon dioxide (CO2) out of the atmosphere. This shift towards clean energy is crucial in the fight against climate change.
Countries Embrace Renewables
Countries like Pakistan and Namibia have nearly doubled their energy capacity in just two years, mainly through solar. This trend is expected to continue as more countries realise the benefits of renewable energy.
In Europe, offshore wind projects generated electricity at about $36 per megawatt-hour in 2023, while gas-fired electricity costs nearly double, around $71 per megawatt-hour.
The UN Secretary-General Antonio Guterres has declared that the global energy transition has reached a point of no return. Over 90% of new renewable energy projects in 2024 are more affordable than fossil fuel-based ones. Solar and wind power could power up to 80% of the world's electricity by 2030, according to the UN.
The cost to produce green hydrogen is expected to drop by half in the next 10 years. Every $1 million invested in renewable energy brings about three new jobs. With these promising developments, the future of renewable energy looks bright.
[1] IEA (2025). World Energy Outlook 2024. Paris: International Energy Agency. [2] REN21 (2025). Renewables 2024 Global Status Report. New York: REN21 Secretariat. [3] Lazard (2024). Levelized Cost of Energy Analysis - Version 15.0. New York: Lazard. [4] BNEF (2024). New Energy Outlook 2024. London: BloombergNEF. [5] IRENA (2023). Perspectives for the Energy Transition: Investment Needs by Technology 2023. Abu Dhabi: International Renewable Energy Agency.
- The cost competitiveness between renewable energy sources and fossil fuels has shifted significantly, with renewables becoming cheaper due to technological advancements, economies of scale, competitive supply chains, and declining costs of associated technologies.
- According to recent reports, the International Energy Agency (IEA) found that clean energy drew $800 billion more investment than fossil fuels in 2024, leading to substantial cost reductions.
- Technological innovations in renewable technologies like solar photovoltaic (PV) and onshore wind have reduced the levelized cost of electricity (LCOE), making renewables substantially cheaper in many cases.
- The global expansion in installation capacity and the growth in manufacturing capacity, particularly for solar PV and wind turbines, have strengthened the market, reduced prices, and fed into cost savings and further scale benefits.
- Declines in battery energy storage system costs are another critical factor that enhances the economic attractiveness of renewables by improving their reliability and integration.
- Renewables provide improved energy security by reducing dependence on volatile international fossil fuel markets and adding economic and strategic value beyond pure generation costs.
- The long-term trend of declining renewable costs, contrasted with the non-declining and volatile costs of fossil fuels, indicate a global shift in the economics of power generation.
- With promising developments in renewable energy technology and finance, the future of renewable energy is looking bright as more countries embrace renewables, and solar and wind power could power up to 80% of the world's electricity by 2030, according to the UN.
