Renewable energy costs fall: in 2022, solar and wind were 29% cheaper than fossil fuels globally

The International Renewable Energy Agency (IRENA) recently published its report Renewable Power Generation Costs in 2022. The report suggests that, despite increased costs of materials and equipment in the energy sector, renewable sources like solar and wind were still more cost-effective than fossil fuels.

The fossil fuel price crisis has accelerated the competitiveness of renewable power. Around 86 per cent (187 gigawatts) of all the newly commissioned renewable capacity in 2022 had lower costs than fossil fuel-fired electricity.

[In 2022,] 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%.

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. The global weighted average cost of electricity from solar PV fell by 89 per cent to USD 0.049/kWh, almost one-third less than the cheapest fossil fuel globally. For onshore wind the fall was 69 per cent to USD 0.033/kWh in 2022, slightly less than half that of the cheapest fossil fuel-fired option in 2022.

Offshore wind and hydropower saw cost increases between 2021 and 2022, but this is apparently an effect of specific market and project activity and not a long-term trend.

The International Monetary Fund (IMF) states that fossil fuel subsidies globally are 7.1% of GDP in 2022. Projections for further increases in fossil fuel prices suggest that governments (and taxpayers) will continue to shoulder higher costs to appease the coal and gas industries. It appears that the primary reason fossil fuels are still a legitimate source of energy is specifically because of these subsidies. It would be prudent to eliminate or significantly reduce them in order to discourage additional pollution.

I'm familiar with the technical problems of energy storage that limit 100% renewable deployment, but it is unreasonable for our energy sector to be predominantly based on fossil fuels. Construction of additional fossil fuel power plants must cease.