81% of new renewable energy capacity added in 2023 was cheaper than fossil fuels

Despite rising costs in recent years, renewables remain cost-competitive with fossil fuels, as 81 percent of renewable capacity additions last year were cheaper than their fossil fuel alternatives, the International Agency said for Renewable Energy (IRENA) in a new report on Tuesday.

Last year, a record 473 gigawatts (GW) of renewable capacity was added globally, 81% of which cost less than their fossil fuel alternatives.

“With a dramatic drop in costs to around four US cents per kilowatt hour in just one year, global solar PV costs in 2023 were 56% lower than fossil fuel and nuclear options,” IRENA said in the report published on The Global Renewables Summit during the UN General Assembly today in New York.

“Renewable prices are no longer an excuse, on the contrary. The record growth of renewables in 2023 exemplifies this,” said IRENA Director General Francesco La Camera.

“Low-cost renewables are a key driver to significantly increase ambition and triple renewable energy capacity by 2030, as modeled by IRENA and set by the UAE Consensus at COP28,” La Camera added.

At the COP28 climate summit in Dubai in late 2023, nearly 200 countries made a collective commitment to triple global renewable energy capacity by 2030, with the goal of maintaining the Paris Agreement’s goal of limiting global warming at 1.5 degrees Celsius. This commitment means that global renewable capacity must increase to 11.2 terawatts (TW) by 2030, up from around 4.2 TW today.

Also today, the International Energy Agency (IEA) said in a separate report that the goal of tripling renewable energy capacity by the end of the decade is still within reach, but massive investment in power grids and energy storage will be needed.

“Without grids and storage, the tripling of renewables will not succeed,” the agency said, adding that more than 25 million kilometers of electricity grids will need to be built or upgraded by 2030, and global energy storage capacity must increase to 1,500 GW. by 2030. Of this, 1,200 GW must be battery storage – a nearly 15-fold increase compared to current levels.

By Tsvetana Paraskova for Oilprice.com

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