How much does renewable energy production cost? 520 billion less than fossil energy

Updated data on renewable energy production costs

(sustainabilityenvironment.com) – How much does renewable energy cost? It depends on the technology and the geographical location, but one thing is certain: it can beat the fossil price and with a clear detachment. This is demonstrated by the latest report by Irena, the International Renewable Energy Agency, analyzing in detail the global weighted average leveled cost of electricity (LCOE).

It is no secret that last year’s energy crisis accelerated the competitiveness of green energy. But the punctual data surprise in any case: about 86% (or 187 GW) of all the new green capacity put into service in 2022 had lower prices than the electricity generated by fossil fuels. And all of the clean energy generated has saved the world $520 billion in fuel costs.

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“IRENA sees 2022 as a real turning point in the deployment of renewable energies as their cost competitiveness has never been greater despite the persistent inflation of raw material and equipment costs globally”, commented the Director General of the Agency, Francesco La Camera. “The regions most affected by the historic price shock have shown considerable resilience, largely due to the massive increase in solar and wind power over the last decade”.

LCOE renewable energy: PV goes down, offshore wind grows

Irena’s report shows that over the past 13-15 years, renewable energy production costs have dropped dramatically. Between 2010 and 2022, photovoltaics and wind became competitive in terms of LCOE with fossil fuels even without financial support. The global weighted average cost of electricity produced by photovoltaics has fallen by 89%. For onshore wind the decrease was 69%.

And the bearish trend did not stop even last year when the increases in materials and components fell on the sector. Worldwide, the weighted average cost of electricity fell by 3% for large-scale solar photovoltaics, reaching $0.049/kWh, almost a third less than the cheapest fossil fuel in the world. The report shows a minus 5% also for onshore wind that has reached 0.033 dollars/kWh, just under half that of the cheapest fossil option of 2022; a minus 2% for concentrated solar energy, 13% for bioenergy and 22% for geothermal.

Only costs for offshore and hydroelectric wind energy increased by 2% and 18% respectively, with the first going from 0.079 dollars/kWh to 0.081 dollars/kWh in 2022.

It is necessary to accelerate the green power

“Today, the renewable energy business case is compelling, but the world has to add 1,000 GW of renewable energy per year on average every year until 2030 to keep the temperature rise within 1.5 ºF,” added The House. This means more than three times the new capacity 2022. “There is no time for a new energy system to evolve gradually as it did for fossil fuels. In preparation for the COP28 to be held in Dubai later this year, today’s report once again shows that with renewable energy, countries have the best climate solution at their fingertips to increase ambitions and take action competitively in terms of costs”.

Read here the full report on renewable energy production costs in 2022.