IRENA: Supply Chain Driving Surge in Renewables Adoption
Last year, the renewable energy sector delivered its strongest performance to date, according to the International Renewable Energy Agency's (IRENA) Renewable Power Generation Costs in 2024 (RPGC) report.
As industries worldwide pivot towards low-carbon power solutions, renewables continue to demonstrate their environmental and economic advantages over fossil fuels. The interplay of technological advancements, efficient supply chains and economies of scale have accelerated the adoption of clean energy solutions, the report highlights.
Innovative developments like battery storage are increasingly altering the economic landscape of renewable energy systems.
Record-setting growth in capacity
The year 2024 saw global renewable power capacity grow by 582 GW, a jump of 19.8% compared to 2023 – the largest single-year increase recorded.
The expansion was largely driven by solar PV and onshore wind technologies, anchored by robust supply chains and effective policy measures, the IRENA report states.
"The global energy system is undergoing a profound transformation, with renewables accounting for an increasing share of power generation," says Francesco La Camera, Director-General of IRENA.
“In 2024 alone, renewables avoided an estimated US$467bn in fossil fuel costs, demonstrating not only their cost-efficiency but also their strategic value for energy security and economic stability. As battery storage and digital solutions evolve and scale up, their role in enabling grid integration, improved economics and larger deployment of renewables will only grow in importance.
“Nevertheless, short-term risks remain. Geopolitical tensions, supply chain bottlenecks and trade-related barriers threaten to disrupt further cost reductions.”
The economical edge of renewables
When analysed via the levelised cost of electricity (LCOE) metric, renewables stood as the most financially compelling option for new electricity generation in 2024.
An outstanding 91% of newly-operational, utility-scale capacities offered power more affordably than the least expensive new fossil fuel alternatives.
In 2024, utility-scale onshore wind emerged as the least expensive source of renewable energy, with a global weighted average LCOE of US$0.034/kWh, followed by solar PV at US$0.043/kWh and hydropower at US$0.057/kWh.
From 2010 to 2024, the total installed costs (TIC) decreased notably, dropping to US$691/kW for solar PV, US$1,041/kW for onshore wind, and US$2,852/kW for offshore wind.
Cost trends in tech
In 2024, there was a slight uptick in LCOE for some technologies compared to 2023:
- Solar PV rose by 0.6%
- Onshore wind by 3%
- Offshore wind by 4%
- Bioenergy by 13%
Despite these increases, costs for other technologies fell:
- Concentrated solar power (CSP) by 46%
- Geothermal by 16%
- Hydropower by 2%
Notably, the costs for battery storage saw a dramatic decline of 93% from 2010 to 2024, reducing from US$2,571/kWh to US$192/kWh.
Cost competitiveness varied across regions. For onshore wind, China (US$0.029/kWh) and Brazil (US$0.030/kWh) reported LCOEs below the global average. In the realm of solar PV, China (US$0.033/kWh) and India (US$0.038/kWh) observed costs under the worldwide mean.
Offshore wind prices averaged US$0.078/kWh in Asia, slightly lower than Europe’s US$0.080/kWh.
Projected trends
Looking ahead to 2029, global TICs are expected to decline further, projected to fall to US$388/kW for solar PV, US$861/kW for onshore wind, and US$2,316/kW for offshore wind.
These predicted reductions will be supported by ongoing technological advancements and the refinement of supply chains.
In the short term, however, IRENA's report says potential cost increases may arise from geopolitical factors, including trade tariffs impacting renewable components, supply chain constraints and manufacturing sector dynamics.