The fossil fuel price crisis has accelerated the competitiveness of renewables, according to a new report by the International Renewable Energy Agency (IRENA).
The report, “Renewable Power Generation Costs in 2022,” found that 86% of all newly commissioned renewable capacity in 2022 had lower costs than fossil fuel-fired electricity.
This trend is expected to continue, as the cost of renewable energy continues to fall. In fact, the report found that the global weighted average cost of electricity from solar PV fell by 89% to USD 0.049/kWh in 2022, almost one-third less than the cheapest fossil fuel globally. For onshore wind, the fall was 69% to USD 0.033/kWh.
The report also found that renewables can protect consumers from fossil fuel price shocks, avoid physical supply shortages, and enhance energy security.
“The business case for renewables is compelling,” said Francesco La Camera, Director-General of IRENA. “But the world must add 1,000 GW of renewable power annually on average every year until 2030 to keep 1.5°C within reach.”
The report concludes that expected high fossil fuel prices will cement the structural shift that has seen renewable power generation become the least-cost source of new generation, even undercutting existing fossil fuel generators.
The report indicated that renewable power generation costs have fallen significantly in recent years, making them more competitive with fossil fuels.
It explained that the fossil fuel price crisis has accelerated this trend, as consumers and businesses seek to reduce their reliance on volatile and expensive fossil fuels.
Moreover, renewables can protect consumers from fossil fuel price shocks, avoid physical supply shortages, and enhance energy security.
The world must add 1,000 GW of renewable power annually on average every year until 2030 to keep 1.5°C within reach.
The report is a clear indication that renewable energy is becoming the future of power generation. As the cost of renewable energy continues to fall, it is becoming increasingly clear that a transition to a renewable energy future is not only possible but also economically beneficial.