The fossil fuel price crisis has accelerated the competitiveness of renewable power, helping global power sector costs by $520bn in 2022.
A new report by IRENA found that 86% (187GW) of all the newly commissioned renewable capacity in 2022 had lower costs than fossil fuel-fired electricity.
Renewable Power Generation Costs in 2022, published by IRENA, shows that the renewable power added in 2022 reduced the fuel bill of the electricity sector worldwide.
New capacity added since 2000 reduced the electricity sector fuel bill in 2022 by at least $520bn, while in non-OECD countries, just the saving over the lifetime of new capacity additions in 2022 will reduce costs by up to $580bn.
Without the deployment of renewables over the last two decades, the economic disruption from the fossil fuel price shock in 2022 would have been much worse and possibly beyond many governments ability to soften with public funding.
IRENA’s Director-General Francesco La Camera said: “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.
“The most affected regions by the historic price shock were remarkably resilient, in large part thanks to the massive increase of solar and wind in the last decade.
“Today, the business case for renewables is compelling, but the world must add 1000GW of renewable power annually on average every year until 2030 to keep 1.5°C within reach, more than three times 2022 levels.
Commodity and equipment cost inflation in 2022 resulted in countries experiencing markedly different trends in costs in 2022, IRENA’s new report finds.
However, at a global level, the weighted-average cost of electricity fell for utility-scale solar PV by 3%, for onshore wind by 5%, for concentrating solar power by 2%, for bioenergy by 13% and for geothermal by 22%.
Only the costs for offshore wind and hydropower increased by 2% and 18% respectively, due to the reduced share of China in offshore wind deployment in 2022 and cost overruns in a number of large hydropower projects.
For the last 13 to 15 years, renewable power generation costs from solar and wind power have been falling.
Between 2010 and 2022, solar and wind power became cost-competitive with fossil fuels even without financial support.