Renewables evolve – fossil fuels ‘run out of road’

Direction of travel

At a time when so much looks grim, the renewable evolution holds out real hope. The astonishing fact is that 91% of new renewable projects are now cheaper than fossil fuels, and all that implies for global energy policy and climate action.

New reports by the International Renewable Energy Agency’s (IRENA) and the United Nations (UN) confirm that renewables have increased their lead over fossil fuels via economies of scale, technology innovation, and supply chain rollout. In other words, last year, the global average cost of electricity generated by solar and onshore wind was, in turn, 41% and 53% cheaper than least-cost new fossil fuels. Meanwhile, global average costs of solar has fallen to $0.043 per kilowatt-hour (kWh) and onshore wind to $0.034/kWh.

Both IRENA and the UN report that new renewables build dwarfs new fossil fuel construction. Renewables ramped by 140% between 2015-2024, whilst fossil fuels registering only a 16% increase. During that time-span, global annual renewables electricity generation increased by 81% compared to a 13% increase for fossil fuels.

The direction of travel is clear. Renewables are now the least cost and the quickest technologies for new electricity generation – and according to UN Secretary General António Guterres, “the world is poised for a breakthrough in the rapid and widespread transition from energy systems dominated by fossil fuels to those dominated by homegrown, low-cost renewables.”

Here comes the sun

As Guterres notes, ‘the sun is rising on a clean energy age’ on the brink of a global climate breakthrough as fossil fuels ‘run out of road’ – adding that the global energy transition is now ‘unstoppable’ due to ‘smart economics’. In terms of new artificial intelligence (AI) demand – even as the industry signals interest in fossil and fissile fuels – Guterres advises the high-tech sector to power data centres with renewables, noting that ‘the clean energy future is no longer a promise, it’s a fact. No government, no industry, no special interest can stop it. Whilst Guterres expects that certain power industry lobbies may still try to derail the transition, the world has now ‘passed the point of no return’ in favour of renewable technology.

Economies of Scale

Of course there’s no such thing as a free lunch, and challenges remain. Trade tariffs, finance gaps and bottlenecks in emerging markets don’t help. Neither do ongoing concerns about critical mineral supply and grid infrastructure investment, with at least 3,000 gigawatts (GW) of renewable power projects waiting for a grid connection. That said, despite the best efforts of the coal, oil and gas industries – renewables helped avoid $467 billion fossil fuel costs in 2024.

Renewables costs have plummeted due to scale economies and widespread deployment, especially in China. Last year, renewables investment totalled $2 trillion – more than double that of fossil fuel investment, and vastly more than nuclear. The result is 582 GW renewable energy additions to the global energy system. That’s 92.5% of all new power capacity added worldwide in 2024, comprising record annual growth of 15.1% and raising total renewables capacity to 4,448 GW. Meanwhile, the International Energy Agency (IEA) reports that global annual renewable capacity additions will rise to 935 GW each year by 2030 due to low generation costs compared to fossil and fissile fuels. These numbers are compelling and carry meaning.

As the Director General of IRENA, Francesco La Camera suggests, ‘the cost-competitiveness of renewables is today’s reality. New renewable power outcompetes fossil fuels on cost, offering a clear path to affordable, secure and sustainable energy.

Time is key to mitigating global heating – and it’s running out. So it makes good sense to choose the swiftest, most practical, flexible, and least-cost power generation options available. With ramping climate impact, construction delays are critical. Here, it’s important to register that build times for solar and onshore wind are between 1-3 years, fossil fuel plants up to 5 years, with new nuclear lagging behind at 10-15 years.

Unlike other power options, the renewable evolution is here and now – on-time and cost effective. The fact is, it’s entirely possible to sustain a reliable power system by expanding renewable energy in all sectors, rapid growth and modernisation of the electricity grid, storage technology roll-out, faster interconnection, and using power far more effectively and efficiently via smart energy management.

The compelling economics of renewables unmask those of fossil and fissile fuels. The world is increasingly rallying behind renewables to do the heavy lifting for the net-zero energy transition. We have the knowledge, the technology and the means. We are fully equipped to adjust the trajectory of the transition and reduce the carbon footprint of the global energy system.

There is a climate emergency, and we need to secure affordable, low-carbon energy to power industry, transport, homes and businesses that can be deployed quickly, economically and reliably. Hard data from IRENA and UN makes it clear that the future backbone of the global power supply system will be renewable, sustainable and cost-effective.

Picture Credits:

1. IRENA Renewable Power Generation Costs in 2024 p37
2. Francesco La Camera, IRENA Director General, IRENA Director General on RENEWABLE POWER GENERATION COSTS IN 2024-IRENA | Trello

For further information

For further information and to read the report please visit the IRENA website using the link below.