IRENA: ‘Renewables are by far cheapest form of power today’

A new report, titled ‘Renewable Power Generation Costs 2021’, published by the International Renewable Energy Agency (IRENA), shows that almost two-thirds of newly installed renewable energy in 2021 had lower costs than the world’s cheapest coal-fired option in G20 countries.

In 2021, costs for renewables continued to fall. For example, the cost of electricity from onshore wind fell by 15%, offshore wind by 13%, and solar panels by 13% compared to 2020.

Critical role

IRENA estimates that, given the current high fossil fuel prices, the renewable power added in 2021 will save about 55 billion dollars from global energy generation costs in 2022.

The new report confirms the critical role that cost-competitive renewables play in addressing today’s energy and climate emergencies by accelerating the transition in line with the 1,5°C warming limit and the Paris Climate Agreement goals.

‘Concrete action’

“Renewables are by far the cheapest form of power today,” said Francesco La Camera, Director-General of IRENA. “Renewable power frees economies from volatile fossil fuel prices and imports, curbs energy costs, and enhances market resilience.”

“With the COP27 in Egypt and COP28 in the UAE ahead, renewables provide governments with affordable energy to align with net zero and turn their climate promises into concrete action with real benefits for people on the ground,” he continued.

Sun and wind

Investments in renewables continue to pay huge dividends in 2022, IRENA’s costs data show. In non-OECD countries (Organisation for Economic Co-operation and Development), the 109 GW of renewable energy additions in 2021 that cost less than the cheapest new fossil fuel-fired option will reduce costs by at least 5,7 million dollars annually for the next 25-30 years.

High coal and fossil gas prices in 2021 and 2022 will also profoundly deteriorate the competitiveness of fossil fuels and make solar and wind energy even more attractive. And new fossil gas generation in Europe will increasingly become uneconomic over its lifetime.

Savings

The European example shows that fuel and CO2 costs for existing gas plants might average four to six times more in 2022 than the lifetime cost of new solar panels and onshore wind commissioned in 2021.

Between January and May 2022, the generation of solar and wind power may have saved Europe fossil fuel imports in the magnitude of no less than 50 billion dollars, predominantly fossil gas.

About IRENA

IRENA is the lead intergovernmental agency for the global energy transformation that supports countries in their transition to a sustainable energy future. It serves as the principal platform for international cooperation, a center of excellence, and a repository of renewable energy policy, technology, resource, and financial knowledge.

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