IRENA claims renewables cheaper than oil, save $409 billion in fuel costs

The International Renewable Energy Agency (IRENA) has disclosed that over $409 billion have been saved in fuel costs due to the deployment of renewable energy, which was cheaper than fossil fuels in 2023.

IRENA, in a new report on Renewable Power Generation Cost in 2023, noted that renewables remain competitive despite fossil fuel prices returning closer to historical cost levels.

According to the report, the record 473 gigawatts (GW) added in 2023, 81 per cent or 382 GW of newly commissioned, utility-scale renewable projects had lower costs than their fossil fuel-fired alternatives.

Coming at a time when fossil fuel is becoming very expensive in Nigeria as consumers shift attention to renewable to reduce cost, IRENA’s new report showed that after decades of falling costs and improving technology, particularly for solar and wind, the socio-economic and environmental benefits of renewable energy deployment were now uniquely compelling.

With a spectacular decline in costs to around four U.S. cents per kilowatt hour in just one year, IRENA said solar PV’s global costs in 2023 were 56 per cent lower than fossil fuel and nuclear options.

Although the situation in Nigeria is slightly different given the exchange crisis and devaluation of the naira, the renewable power deployed globally since 2000, according to IRENA has saved up to $409 billion in fuel costs in the power sector.

The Director-General of IRENA, Francesco La Camera, said: “Renewable power remains cost-competitive vis-à-vis fossil fuels. The virtuous cycle of long-term support policies has accelerated renewables. In return, growth has led to technology improvements and cost reductions. Prices for renewables are no excuse anymore, on the contrary. The record growth of renewables in 2023 exemplifies this. Low-cost renewables represent a key incentive to significantly increase ambition and triple renewable power capacity by 2030, as modeled by IRENA and set by the UAE Consensus at COP28.”