“Turning point:” Wind and solar deliver $810 bn in savings from fossil fuels in single year

The International Renewable Energy Agency has hailed a “turning point” in the transition to green energy, with new data that shows wind and solar cut $US520 billion ($A810 billion) from the electricity sector fuel bill in 2022 alone.

The new data also shows that in non-OECD countries, just the saving over the lifetime of new capacity additions in 2022 will reduce costs by up to another $UA580 billion. And they will deliver substantial economic benefits from reducing CO2 emissions and local air pollutants.

The report says that without the deployment of renewables over the last two decades, the economic disruption from the fossil fuel price shock in 2022 would have been much worse and possibly beyond many governments ability to soften with public funding.

“IRENA sees 2022 as a veritable turning point in the deployment for renewables,” said Francesco La Camera, IRENA’s director-general. “Its cost-competitiveness has never been greater despite the lingering commodity and equipment cost inflation around the world”

“The most affected regions by the historic price shock were remarkably resilient, in large part thanks to the massive increase of solar and wind in the last decade.”

“Today, the business case for renewables is compelling, but the world must add 1 000 GW of renewable power annually on average every year until 2030 to keep 1.5^°C within reach, more than three times 2022 levels.

“There is no time for a new energy system to evolve gradually as was the case for fossil fuels. In preparation of the COP28 in Dubai later this year, today’s report shows once again that with renewables, countries have the best climate solution at hand to raise ambition and take actions in a cost-competitive way.”

ADespite global cost inflation impacting the renewable energy industry, a new report from the International Renewable Energy Agency (IRENA) showed that around 86% of newly commissioned renewable energy capacity in 2022 had lower costs than new fossil fuel-fired electricity options.

According to the Renewable Power Generation Costs in 2022 report published by IRENA on Tuesday, the global weighted average LCoE of onshore wind has fallen from 95% higher than the lowest fossil fuel-fired cost to be 52% lower than that of the cheapest fossil fuel-fired options.

The success of onshore wind, however, pales in comparison to solar PV, which was 710% more expensive than the cheapest fossil fuel-fired solution in 2010, but 29% less than the cheapest fossil fuel-fired solution in 2022.

It said that across the globe, at least 86% of new utility-scale solar PV capacity additions and 87% of onshore wind capacity additions had lower costs than new fossil fuel options.

This represented 187GW of new renewable capacity – and came despite the lingering impact of supply chain disruptions stemming from the COVID-19 pandemic and global inflation.

However, the global cost inflation means that most markets, excluding China, saw equipment price increases for solar PV and wind turbines.

However, despite these issues, the competitiveness of renewable energy technologies far and away outpaced that of the fossil fuel industry, “with fossil fuel prices rising far more than the prices of their renewable alternatives.”