Renewables’ competitiveness grows as costs fall for most technologies

The competitiveness of renewable power continued to improve in 2022, accelerated by the fossil fuel price crisis, according to a report released today by the International Renewable Energy Agency (IRENA).

Around 86%, or 187 GW, of newly commissioned renewable power generation last year had lower costs than fossil fuel-fired power.

IRENA estimates that the renewable capacity built globally since 2000 saved USD 521 billion (EUR 482bn) in fuel costs in the electricity sector in 2022.

“IRENA sees 2022 as a veritable turning point in the deployment for renewables as its cost-competitiveness has never been greater despite the lingering commodity and equipment cost inflation around the world,” said IRENA’s director-general Francesco La Camera.

He added that while the business case for renewables is compelling, the world must add an average 1,000 GW of renewable power a year until 2030, more than three times the 2022 additions, to maintain the possibility of limiting the temperature rise to 1.5 degrees C.

According to IRENA’s Renewable Power Generation Costs in 2022 report, the global weighted average levelised cost of electricity (LCOE) from newly commissioned utility-scale solar photovoltaics (PV) decreased by 3% between 2021 and 2022, while onshore wind power experienced a 5% reduction. Concentrating solar power (CSP) costs dropped by 2%, while bioenergy and geothermal energy saw more substantial declines of 13% and 22%, respectively.

These cost reductions were observed despite commodity and equipment cost inflation in 2022, which however led to diverging cost trends in different countries.

At a global level, only the costs for offshore wind and hydropower increased by 2% and 18%, respectively. The former was due to a lower share of China in 2022 offshore wind installations, and the latter to cost overruns in a number of big projects.

For newly commissioned onshore wind projects, the global weighted average LCOE in 2022 was USD 0.033 per kWh, for utility‑scale solar USD 0.049, and for offshore wind USD 0.081.

(USD 1 = EUR 0.925)

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