IRENA Sees Turning Point in Electricity Costs: Solar, Wind And Storage Clearly Outperform Fossil Fuels
Abu Dhabi (UAE) - The International Renewable Energy Agency (IRENA) sees hybrid power systems combining solar and wind energy with battery storage as a turning point for the global electricity system. According to a new report, such 24/7 renewables can already be more cost-effective than new coal and gas power plants in modelled scenarios for high-quality solar and wind regions, while also enabling continuous electricity supply.
24/7 renewables become competitive with fossil fuel power plants
The report “24/7 renewables: The economics of firm solar and wind” shows that solar and wind power plants combined with battery storage are already competitive in many regions today. The so-called “firm levelised costs of electricity” for solar-plus-storage range between 54 and 82 US dollars per megawatt-hour in high-resource regions.
By comparison, new coal-fired power plants in China cost 70 to 85 US dollars per megawatt-hour according to IRENA, while new gas-fired plants worldwide exceed 100 US dollars. This increasingly shifts the cost logic in favour of renewable systems, which can also provide continuous electricity supply.
UN Secretary-General António Guterres emphasises in the report: “The worst energy crisis in decades has exposed the true cost of fossil fuel dependence. Renewable power is increasingly the most affordable, reliable and secure option.”
Sharp decline in costs for solar, wind and battery storage
A key driver of competitiveness, according to IRENA, is the sharp decline in technology costs. Since 2010, investment costs for solar PV have fallen by 87 percent, onshore wind by 55 percent, and battery storage by as much as 93 percent.
This development is also driving down the costs of combined generation and storage systems. According to the report, firm costs for solar-plus-storage have fallen from over 100 US dollars per megawatt-hour in 2020 to 54 to 82 US dollars in 2025. For wind-plus-storage systems, IRENA estimates costs in 2025 ranging from around 59 US dollars (Inner Mongolia) to 88–94 US dollars (Brazil, Germany and Australia) per megawatt-hour, depending on the region.
IRENA also expects further significant efficiency gains: by 2030, costs could fall by around 30 percent, and by 2035 by around 40 percent. At the best locations, values below 50 US dollars per megawatt-hour are considered possible.
Hybrid renewable energy and storage systems could also often be deployed within one to two years, making them available more quickly in many markets than new gas-fired power plants.
24/7 power systems as a pillar of energy security and new demand clusters
Beyond cost considerations, IRENA sees system functionality increasingly coming to the forefront. 24/7 renewables could ease pressure on grids, reduce price volatility, and deliver electricity during high-price periods. At the same time, they are particularly well suited for energy-intensive applications such as artificial intelligence and data centres.
IRENA Director-General Francesco La Camera also sees this as disproving the long-standing argument that renewable energy is unreliable. “24/7 renewable power is now cost-competitive with fossil fuels,” La Camera says. Given geopolitical risks in oil and gas markets, including ongoing disruptions in the Strait of Hormuz, resilient renewable systems could also strengthen energy security and price stability.
In addition, hybrid systems open up new perspectives for hard-to-decarbonise industries, such as the production of synthetic fuels. A high utilisation rate is essential in this context, which can be better achieved through the combination of different renewable sources than through single technologies.
According to IRENA, this marks a shift in the economic foundation of future electricity systems towards hybrid renewable supply concepts.
Source: IWR Online, 08 May 2026