IRENA Analysis Finds Solar and Wind With Storage Now Cost-Competitive With Coal and Gas

The International Renewable Energy Agency says solar and wind power combined with battery storage can now supply electricity around the clock at prices competitive with or lower than new coal and gas plants in high-quality resource areas. IRENA Director-General Francesco La Camera stated that the economics of energy systems have reached a structural shift.

He said no one can question the economic viability or reliability of renewables any longer.

Firm solar-plus-storage systems range from $54 to $82 per megawatt-hour, while firm wind-plus-storage systems range from $59 to $94 per megawatt-hour, according to the IRENA analysis. In China, some solar-plus-storage projects approach $30 per megawatt-hour.

New coal plants typically cost $70 to $85 per megawatt-hour, and new gas-fired generation can exceed $100 per megawatt-hour. Battery storage costs have dropped more than 90 percent since 2010, with additional declines of around 30 percent expected by 2030.

These reductions are projected to push the most competitive sites below $50 per megawatt-hour by the mid-2030s.

Camera said the war in Ukraine and tensions in the Strait of Hormuz have exposed risks in centralized fossil fuel supply chains. He noted that renewable systems avoid long-distance fuel transport and associated chokepoints. Electric grids designed for centralized fossil generation now face transmission bottlenecks that can slow renewable expansion.

At the same time, demand is rising faster than expected due to electrification, industrial growth, and new loads such as data centers and artificial intelligence. La Camera pointed to a roughly $1 billion renewable energy project in Central Asia that used blended finance involving sovereign investment, multilateral lending, and private enterprise.

Similar coordinated efforts are underway in parts of Africa between development finance institutions and Gulf energy investors.

Camera credited the COP28 agreement to triple global renewable capacity by 2030 as a key inflection point. He said renewable capacity is now growing faster than any other energy source because of lower costs and faster construction times compared with gas plants and other centralized infrastructure.