IRENA: How have Renewables Avoided US$467bn of Fossil Fuels?
The renewable energy sector in 2024 delivered its strongest performance on record according to the International Renewable Energy Agency's (IRENA) Renewable Power Generation Costs in 2024 (RPGC) report.
As the global energy system shifts towards low-carbon power, renewables are proving not only environmentally essential but also could be economically superior to fossil fuels.
Advances in technology, competitive supply chains and scaling effects have driven unprecedented deployment, the report says.
Complementary innovations, such as battery storage, are changing the economics of clean power.
Record-breaking capacity growth
Global renewable power capacity additions in 2024 reached 582 GW, a 19.8% increase compared to 2023 and the largest annual gain ever recorded.
This surge was driven by rapid expansion in solar PV and onshore wind, supported by mature, efficient supply chains and strong policy frameworks, the IRENA data says.
The data shows that variable renewable technologies such as solar and wind accounted for the majority of new capacity.
“The global energy system is undergoing a profound transformation, with renewables accounting for an increasing share of power generation,” says Francesco La Camera, Director-General of IRENA, in its RPGC report.
“In 2024 alone, renewables avoided an estimated US$467bn in fossil fuel costs, demonstrating not only their cost-efficiency but also their strategic value for energy security and economic stability.
“As battery storage and digital solutions evolve and scale up, their role in enabling grid integration, improved economics and larger deployment of renewables will only grow in importance.
“Nevertheless, short-term risks remain. Geopolitical tensions, supply chain bottlenecks and trade-related barriers threaten to disrupt further cost reductions.”
Renewables as a cost-competitive option
On a levelised cost of electricity (LCOE) basis, 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 new fossil fuel-based alternative.
In 2024, new utility-scale onshore wind projects were the cheapest source of renewable electricity, with a global weighted average LCOE of US$0.034/kWh, followed by new solar PV at US$0.043/kWh and hydropower at US$0.057/kWh.
Between 2010 and 2024, total installed costs (TIC) fell to US$691/kW for solar PV, US$1,041/kW for onshore wind and $2,852/kW for offshore wind.
Technology cost trends
In 2024, LCOE increased slightly for some technologies compared to 2023:
- Solar PV rose by 0.6%
- Onshore wind by 3%
- Offshore wind by 4%
- Bioenergy by 13%.
Despite some increases for LCOE, costs fell for:
- Concentrated solar power (CSP) by 46%
- Geothermal by 16%
- Hydropower by 2%.
Battery storage costs declined by 93% from 2010 to 2024, falling from US$2,571/kWh to US$192/kWh.
Regional variations
Cost competitiveness varied by market.
For onshore wind, China (US$0.029/kWh) and Brazil (US$0.030/kWh) recorded LCOEs below the global average.
For solar PV, China (US$0.033/kWh) and India (US$0.038/kWh) reported below-average costs.
Offshore wind prices averaged US$0.078/kWh in Asia, slightly below Europe’s US$0.080/kWh.
Outlook for the next five years
By 2029, global TICs are projected to fall to US$388/kW for solar PV, US$861/kW for onshore wind and US$2,316/kW for offshore wind.
Long-term reductions will be driven by continued technological learning and supply chain maturity.
However, short-term cost increases could emerge from geopolitical risks, such as trade tariffs on renewable components, supply chain bottlenecks and Chinese manufacturing sector dynamics, IRENA's report says.