The International Renewable Energy Agency (IRENA) recently released its Renewable Power Costs to 2023 report at the Global Renewable Energy Summit, suggesting that renewable energy remains highly competitive despite the return of fossil fuel prices to historic levels.81% of new renewable energy in 2023 will be at a lower cost than fossil fuel alternatives, making a very compelling business and investment case for countries to increase renewable energy by 2030 by A compelling business and investment rationale for the goal of tripling installed capacity by 2030.
The report shows that after decades of cost containment and technological improvements, the socio-economic and environmental benefits of renewable energy have become extremely attractive. Related data shows that in 2023, a record 473 GW of new renewable energy capacity will be added globally. Of this, 811 TP3T of newly commissioned utility-scale renewable energy projects cost less than their fossil fuel alternatives. For example, the cost of solar photovoltaic (PV) power drops dramatically to around 4 cents/kWh in 2023, making it globally cheaper than fossil-fueled and nuclear power generation by 561 TP3 T. Overall, renewable energy deployed globally has saved the power sector about $409 billion in fuel costs since 2000.
Francisco La Carmela, Director General of the International Renewable Energy Agency (IRENA), said: "Renewable energy is highly cost-competitive with fossil fuels. A virtuous cycle of long-term supportive policies has accelerated the growth of renewable energy, and this growth will also lead to technological improvements and cost reductions. The record growth of renewable energy in 2023 suggests that, in the future, price will no longer be a reason not to use renewable energy. In addition, the 'UAE Consensus' adopted at the 28th UN Climate Change Conference makes it clear that low-cost renewable energy is a key driver for the world to grow installed renewable energy capacity up to three times by 2030."
To achieve this goal, global renewable energy capacity must reach 11.2 terawatts by 2030, with an average annual capacity addition of 1,044 gigawatts. The International Renewable Energy Agency (IRENA) in the World Energy Transition Outlook (WETO) suggests that as of 2030, solar photovoltaic (PV) and onshore wind alone will generate 8.5 terawatts (TW) of generating capacity; and, most importantly, while realizing the goal of growing to three times that amount, there must also be important conditions to drive the energy transition, such as energy storage.Between 2010 and 2023, the cost of battery storage projects has declined by 891 TP3T, facilitating significant integration of solar and wind energy while addressing various grid infrastructure challenges.
Carmela added: "The next few years will see significant growth in almost all renewable energy sources, which will create huge opportunities for countries to develop. Analysis shows that solar photovoltaic and onshore wind power will have the greatest impact on the target to triple the growth of renewable energy. With the lower cost of renewable energy on the global market, policymakers can quickly put solutions in place to reduce dependence on fossil fuels, limit the economic and social damage caused by the use of carbon-intensive energy sources, drive economic development, and capture energy security benefits."
The report suggests that the global weighted average cost of electricity for most newly commissioned renewable energy projects declines in 2023, with solar photovoltaic power declining by 121 TP3T, onshore wind power by 31 TP3T, offshore wind power by 71 TP3T, concentrating solar thermal power by 41 TP3T, and hydroelectricity by 71 TP3T.For non-OECD economies with growing electricity demand and a For non-OECD economies with growing electricity demand and an urgent need for new generating capacity, the cost of their power systems over the operating life of the system will be significantly lower if the cost of electricity generated from renewable sources is lower than the cost of electricity generated from fossil fuels.The cumulative fuel cost savings from renewable energy deployed globally in power generation alone is about $409 billion from 2000 to 2023, with the highest savings in Asia (about $212 billion), followed by Europe (about $212 billion), and Europe (about $1 billion). ), followed by Europe (~$88 billion) and South America (~$53 billion), then North America (~$19 billion), Central Asia (~$12 billion) and Africa (~$11 billion). In terms of technology, onshore wind generated the largest cost savings, at $149 billion; hydropower savings were second, at $117 billion; and solar photovoltaic was third, at $78 billion.
In the wind power market, China continues to lead the world, according to the report.In 2023, China is once again the largest market for new onshore wind power additions, with its share of global wind capacity additions rising to 661 TP3T, up from 501 TP3T in 2022.The global weighted average total installed cost of newly commissioned onshore wind projects has fallen by 131 TP3T year-on-year, from US$1,322/kW to 1154 USD/kW. Meanwhile, the global offshore wind market added 11 GW of new capacity in 2023, the second highest since 2021. Of this, China accounts for 651 TP3T of the new capacity additions. in fact, the global weighted average total installed cost of offshore wind drops from $3,478/kW in 2022 to $2,800/kW in 2023, driven by China's share of the new capacity additions and the commissioning of projects in new markets.
The report calls for renewable energy generation to become the preferred low-cost method of power generation. Policymakers and stakeholders in all countries and regions should focus their efforts on ensuring that policies, regulations, market structures, support instruments, de-risking mechanisms and financing are rapidly aligned with the goal of tripling renewable energy capacity and submitting a new round of nationally owned contribution targets in 2025, in line with the Paris Agreement.
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