IRENA: How Renewable Energy has Cut US$467bn in Fossil Fuels
Renewable energy has delivered its strongest annual performance to date according to the The International Renewable Energy Agency (IRENA) Renewable Power Generation Costs in 2024 (RPGC) report.
As low-carbon power expands, the economics of the energy mix continue to shift in favour of clean electricity.
The report outlines how advances in technology, global supply chain maturity and the effects of scaling up production all contribute to the increased affordability of renewables.
In particular, battery storage and other complementary innovations have begun to reshape the economics of electricity, further strengthening the case for clean energy over fossil fuels.
Growth in global capacity led by solar and wind
The report outlines how advances in technology, global supply chain maturity and the effects of scaling up production all contribute to the increased affordability of renewables.
In particular, battery storage and other complementary innovations have begun to reshape the economics of electricity, further strengthening the case for clean energy over fossil fuels.
In 2024, renewables helped to avoid an estimated US$467bn in fossil fuel costs, according to IRENA.
Among the countries seeing the highest savings are Indonesia (US$2.5bn), Mexico (US$2.4bn), Malaysia (US$2.0bn), Argentina (US$1.4bn), the Philippines (US$1.4bn) and South Africa (US$0.9bn).
Global renewable power capacity additions hit a record high of 582 GW in 2024.
This is a 19.8% increase compared to 2023 and stands as the largest annual increase ever recorded.
Solar PV and onshore wind are the main contributors, both backed by mature supply chains and effective policy frameworks.
Variable renewable technologies, particularly solar and wind, represent the majority of new capacity added.
“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.”
The pace of deployment highlights how renewables are becoming the default choice for power system expansion.
New projects are being delivered at scale and speed, enabled by standardised development models and strong investor confidence.
Renewables remain most cost-effective electricity source
The levelised cost of electricity (LCOE), a measure of the average lifetime cost of electricity from new power plants, shows that renewables remain the lowest-cost option.
In 2024, 91% of newly commissioned utility-scale renewable capacity delivers electricity at a lower cost than the cheapest fossil fuel alternative.
Onshore wind is the most affordable, with a global weighted average LCOE of $0.034/kWh.
Solar PV follows at US$0.043/kWh, with hydropower averaging US$0.057/kWh.
In terms of capital cost, the total installed costs (TIC) in 2024 are:
Solar PV: US$691 per kilowatt (kW)
Onshore wind: US$1,041/kW
Offshore wind: US$2,852/kW
Battery storage also plays a growing role in energy systems.
Costs for battery storage fall by 93% between 2010 and 2024, dropping from US$2,571/kWh to US$192/kWh.
Not all technologies follow the same trend. LCOE for some types of renewables increases slightly compared to 2023:
Solar PV up by 0.6%
Onshore wind up by 3%
Offshore wind up by 4%
Bioenergy up by 13%
However, others record notable cost reductions:
Concentrated solar power (CSP) falls by 46%
Geothermal drops by 16%
Hydropower declines by 2%
Regional differences and future projections
LCOE for renewables varies by region.
For onshore wind, China and Brazil report lower than global average costs at US$0.029/kWh and US$0.030/kWh respectively.
In solar PV, China (US$0.033/kWh) and India (US$0.038/kWh) are also below the global average.
Offshore wind comes in at $0.078/kWh in Asia and US$0.080/kWh in Europe.
Looking ahead, IRENA projects further reductions in TIC by 2029:
Solar PV: US$388/kW
Onshore wind: US$861/kW
Offshore wind: US$2,316/kW
These decreases are expected to come from continued learning and improvements in technology, as well as more efficient and established supply chains.
However, geopolitical developments, trade policy and market disruptions, particularly involving Chinese manufacturing, could temporarily affect pricing and deployment rates.