91% of new renewable projects now cheaper than fossil fuels alternatives

RENEWABLES have maintained their cost leadership in global power markets, a new report Renewable Power Generation Costs in 2024 released on Tuesday by the International Renewable Energy Agency (Irena) found.

- PHILIPPA LARKIN

Renewables maintained their price advantage over fossil fuels, with cost declines driven by technological innovation, competitive supply chains, and economies of scale, the report said.

In 2024, solar photovoltaics (PV) were, on average, 41% cheaper than the lowest-cost fossil fuel alternatives, while onshore wind projects were 53% cheaper. Onshore wind remained the most affordable source of new renewable electricity at $0.034/kWh, followed by solar PV at $0.043/kWh.

The addition of 582 gigawatts of renewable capacity in 2024 led to significant cost savings, avoiding fossil fuel use valued at about $57 billion (R1 trillion).

Notably, 91% of new renewable power projects commissioned last year were more cost effective than any new fossil fuel alternatives.

Renewables are not only cost-competitive visa-vis fossil fuels but are advantageous by limiting dependence on international fuel markets and improving energy security.

The report said the business case for renewables is now stronger than ever. While continued cost reductions are expected as technologies mature and supply chains strengthen, short-term challenges remain.

Geopolitical shifts including trade tariffs, raw material bottlenecks, and evolving manufacturing dynamics, particularly in China, pose risks that could temporarily raise costs.