Economic Trends in Renewable Energy

This visual helps explain 3 concepts that A LOT of people forget about solar☀️   Solar energy’s fuel (sunshine) is free and delivered daily.   Therefore, electricity from solar does not include the cost of each marginal unit of fuel. That makes sense to people.   But the full implications of an energy system built upon a zero-cost, abundant fuel source are often still dramatically underestimated.   There are three other kinds of savings that solar provides:    Infrastructure Savings – As shown in the graphic, the world spends billions of dollars every year extracting oil, gas, and coal and transporting to the places it will be burned. The infrastructure to mine, refine, and move these fuels from point A to point B, whether by boat, rail, or pipeline, requires regular maintenance and TONS of investment. With solar, the sun does it all for us, delivering usable photons every morning.   Predictability Savings – When you’re relying on a globally traded commodity to produce electricity, the final cost of each gigawatt can fluctuate with the current price of oil and coal. Market uncertainty can send the price of these commodities (and the final price for electricity) soaring on a whim. But it doesn’t need to be this way. Once a solar farm is installed, the cost of each unit of electricity is basically fixed. This helps utilities better predict their costs and that’s a huge benefit to consumers.   Energy Independence Savings – Because oil, gas, and coal rely on complex international supply chains and lots of global infrastructure, there is a lot more that can go wrong. Geopolitical shocks, natural disasters, port congestion, and accidents (remember the Suez Canal blockage?) can all impact the predictability and reliability of coal and gas generation. No one can embargo the sun or interrupt its delivery to us, so solar energy is fundamentally more local and more independent.   I think it’s important to explain these hidden savings when talking to naysayers because, while they may understand that free sunshine = free fuel, they may not understand just how much they’re paying for the infrastructure, uncertainty, and volatility of fossil fuels.

#Batteries have become so cheap that around-the-clock solar is becoming economically viable for the first time. And this isn't just theoretical, it’s based on real world data. In 2024 alone, average battery prices fell by 40% and signs are a similar fall is occurring in 2025. These cost reductions are being driven by: ➡️ The rapid scale up of assembly plants ➡️ Intense manufacturer competition ➡️ The continued decline of LFP battery cell prices But there’s more to it than just falling prices. Batteries are also getting better: ✅ Higher round-trip efficiency ✅ Longer usable lifetimes ✅ Projects becoming cheaper to finance as the technology de-risks 20 years is now the standard design life of the battery – a big shift from just a few years ago. Taken together, this changes the economics entirely. Pairing solar with enough batteries to keep the electricity flowing though the night is no longer a distant dream – it's an economic reality. At around just $76/MWh all in, dispatchable solar is already competitive with other forms of firm generation in many markets. This analysis focuses on markets outside of China and the United States, where competitive procurement of Chinese-manufactured equipment is reshaping global storage economics. This isn’t a silver bullet. Future power systems will still rely on a diversified mix, including wind, hydro where available, gas backup, potentially nuclear, interconnection and longer-duration storage. But cheap batteries fundamentally change the role solar can play. They turn it from a purely daytime resource into a genuine round-the-clock contributor and this has profound implications for power systems, investment decisions and energy security. Data and original chart is from Ember's latest report, link below. #energy #renewables #energytransition

Looking backwards to predict the future is misleading. New technologies scale far faster than their predecessors. Solar took just eight years to grow from 100 TWh to 1,000 TWh—and only three more years to double again, surpassing 2,000 TWh in 2024. For each of the past three years, solar has been the largest source of new electricity worldwide. Nothing else in power generation has scaled this quickly. Falling costs, modular design, and rapid deployment are turning solar into the backbone of the emerging global energy system. It’s clean, scalable, and increasingly central to modern economies. And as battery costs tumble and storage deployment accelerates, a growing number of projects are targeting round-the-clock solar electricity.

91% of new energy is now 75% cheaper than alternatives New data reveals a fundamental shift in the energy landscape, as per trends from the last years. Over the past decade, renewable energy costs have plummeted across all major technologies: • Solar PV costs dropped 75% • Onshore wind fell 62% • Offshore wind decreased 60% • Concentrated solar power declined 54% The strategic implications are clear: 81% of renewable capacity added in 2023 now delivers electricity at lower costs than alternatives, which can save a lot of resources of business. For businesses, this data underscores three critical considerations: →Financial optimisation: Renewable investments now offer superior long-term cost predictability compared to volatile fossil fuel markets. →Risk mitigation: Early movers in renewable adoption are positioning themselves ahead of inevitable regulatory and market shifts. →Stakeholder value: ESG-focused investors and customers increasingly expect measurable progress on clean energy transitions. Source: International Renewable Energy Agency (IRENA) Our World in Data Visual Capitalist #renewableenergy #sustainability #cleanenergy #energytransition #ceo #csuite #esg #sustainablebusiness #climatetech #energyeconomics #leadership #futureofenergy #solarpower #windpower #cleantech #energyinnovation

The REDIII deadline ends today! Which member states are on track?   With the amendment of the Renewable Energy Directive (REDIII), the EU adopted clear targets for the ramp-up of renewable fuels in the transport sector at the end of 2023. The implementation of REDIII into national law will leverage the reduction of CO2 emissions in the transport sector. The deadline for implementation ends today, but most member states are behind schedule. So far, only Finland and the Czech Republic have fully transposed REDIII into national law (Denmark has transposed today but we haven’t included them yet).   Our analysis shows major differences across the EU, both in terms of the current starting position and the level of ambition of the national targets.   🇫🇮 Finland is a clear pioneer: REDIII has been fully implemented and is pursuing ambitious but realistic targets in all relevant categories. I have analysed this in detail here: https://lnkd.in/dutAR33X   🇨🇿 The Czech Republic has also implemented RED III, but is the opposite of Finland with targets way below - both in terms of the level of ambition and the current share of renewable fuels. Find here more information: https://lnkd.in/d3wBAUDD   🇫🇷 France is also striking while the country is above the EU target with an RFNBO target of 1.5%, the targets in the other areas fall well short of the European framework. At the same time, France has announced that it does not intend to implement the directive on time and is generally critical of REDIII.   In a European comparison, Ireland, Italy, the Netherlands, Portugal and Sweden also stand out. Ireland pursues by far the most ambitious targets of all member states, the realisability of which appears questionable. Italy has not yet submitted a REDIII draft but has formulated ambitious targets as part of its National Energy and Climate Plan. The Netherlands, Portugal and Sweden have submitted drafts and have a medium, but comparatively progressive level of ambition in the top third of EU states.   The range of strategies and progress within the EU clearly shows how differently the ramp-up of renewable fuels has progressed so far - and how much action is needed to realise the REDIII targets in a timely and substantial manner.   At von Beust & Coll. Beratungsgesellschaft mbH & Co. KG we continuously monitor and analyse national implementation. The ongoing assessment is essential for many corporate decisions - especially regarding regulatory planning certainty, market entry strategies and investment decisions. Interested in #REDIII monitoring? Reach out to Theresa Haas and me.

Interesting graph from S&P Global Commodity Insights on the "Break-even estimates for 10-year PPAs starting in 2026". The average forecast price is for a pay-as-produced PPA 2026-2035 to recover new build, operating and financing costs. Unsurprisingly, we see quite large difference for solar, from 38 €/MWh in Spain to 115 €/MWh in Finland (some places are indeed sunnier). Wind is more stable and around 60 to 80 €/MWh. But how these prices compare with the capture prices? For solar, the capture prices were in 2024: 42 €/MWh in Spain, 47 €/MWh in Germany, and 39 €/MWh in France. So, for France and Germany, the capture prices are already quite well lower in 2024. The questions are: - Will the solar capture prices continue their downward trend? With the current expansion plan, it is likely that it will continue, in my opinion. - Or will consumption and storage compensate enough and offer some relief? - Will we still observe an appetite for more solar (both on corporate PPA and on government-back support such as Contract-for-difference)? Most probably, solar will increasingly be associated with storage in order to increase the capture rate. But how much storage compared to solar? This is certainly a dynamic question that will keep evolving with evolving costs and market prices. In any case, I believe that solar should also start providing power reserves in order to have another source of revenues. See here: https://lnkd.in/e22HPYUv And here for insights on capture rates in 2024:https://lnkd.in/eD3XdAWs

Starting January 2025, the EU Emissions Trading System (EU-ETS) will exempt renewable fuels of non-biological origin (RFNBOs)—such as e-NG (electric natural gas), green hydrogen, and other e-fuels—from CO2 emission certificates. This significant amendment zero-rates emissions from certain low-carbon fuels, including RFNBOs and synthetic low-carbon fuels, under the EU ETS framework. The update provides regulatory clarity and removes additional costs for companies using these fuels. For producers, customers, and investors, this development confirms the role of RFNBOs in achieving Europe’s climate goals and strengthens their green credentials. With the new system set to be operational from 2025, it’s now up to member states to incorporate the Renewable Energy Directive (RED) III into national policies, ensuring alignment with these EU-level changes and unlocking the full potential of RFNBOs across Europe. 🇪🇺 🔗 https://lnkd.in/eVPTWCC7 #eNG #RFNBO #efuel #WintheClimateRace #Europe

Prices of electricity have been rising sharply across much of Europe. At the same time, markets with higher shares of wind (and other renewables) tend to see lower average wholesale prices over time as low-marginal-cost generation displaces more expensive fossil fuel plants. The takeaway is straightforward: building more wind capacity and integrating it effectively into the grid can help reduce electricity price pressure while contributing to energy security and emissions goals.

At #COP28, the outcome of the First Global Stocktake called on all parties to the UNFCCC to triple renewable power generation capacity and double the rate of energy efficiency improvement by 2030. Dubbed the #UAEConsensus, and built upon the on the recommendations of IRENA, this embodied the global determination to rapidly scale up renewables. The year 2023 marked a significant milestone in this journey. The record growth of 473 GW of installed capacity, coupled with a continued decline in technology costs, indicate that world is embracing the transition away from fossil fuels. According to IRENA's latest report, renewable power is increasingly cost-competitive with fossil fuels – 81% of renewable capacity additions in 2023 produce cheaper electricity than fossil fuel alternatives – and the accelerated deployment of renewable power continues to trigger technology advancements in a virtuous cycle of production efficiency and cost reduction. Solar PV, wind and hydropower experienced the most considerable cost decreases in 2023. The global average cost of electricity (LCOE) from solar PV fell by 12%, offshore wind and hydropower by 7%, and onshore wind by 3%, with China once again dominating new capacity additions. The global average cost of electricity from utility-scale solar PV fell to USD 0.044 per kilowatt-hour (kWh) and onshore wind to USD 0.033/kWh. Low-cost renewables incentivise greater ambition; in the coming years, remarkable growth across all renewable energy sources is expected. Yet, it remains crucial to ensure the progress and deployment of renewables balances different technologies and is distributed more equitably across countries and regions. The energy transition relies on key enablers, including physical infrastructure (such as for energy storage and flexibility), policy and regulation, international collaboration, and strengthened institutional and human capacities. Renewable energy reduces exposure to volatile fossil-fuel import bills, lowers average electricity system costs, and avoids the damaging impacts of high electricity prices on consumers and industry. It offers policy makers a compelling solution to reduce fossil fuel dependency, limit damage to environmental and human health, enhance energy security and drive economic development. I encourage you to explore IRENA’s 'Renewable Power Generation Costs in 2023' report for more detailed insights 👇.

Global renewable capacity is set to double by 2030 amid rising headwinds from supply chains, grid integration & financing. Solar PV dominates with 80% of growth. In addition to established markets, it also surges in Saudi Arabia, Pakistan & Southeast Asia. More in the International Energy Agency (IEA)’s Renewables 2025 → https://iea.li/48AJeSf Solar is leading the growth – but wind, hydropower, bioenergy & geothermal are all contributing too. Geothermal is on course to hit historic highs in key markets while pumped-storage hydro is growing strongly, helping integration of solar & wind. More in our full report → https://iea.li/3Ww4MYB The outlook for offshore wind stands apart, with the industry facing challenges due to policy changes, supply chain bottlenecks & rising costs. Our forecast for its global capacity growth to 2030 is about 25% lower than in last year's report. Major solar PV & wind manufacturers continue to face financial struggles despite strong deployment globally. In China, PV prices are down over 60% since 2023 due to a supply glut & fierce competition for market share. And wind manufacturers outside China are reporting losses. Despite these challenges, companies' confidence in renewables remains strong – with investors & buyers benefitting from low solar prices. Most major developers have maintained or raised their 2030 deployment targets from last year, reflecting resilience & optimism in the sector. As renewables take on a greater role, policymakers must play close attention to vulnerabilities. Global supply chains for solar PV & for rare earths used in wind turbines are highly concentrated in China and are set to only diversify slightly by 2030 under current policy settings. The rise of variable renewables is also placing growing pressures on electricity systems. Curtailment & negative prices are becoming more frequent, causing economic inefficiencies & deterring investment. This underscores the need for investment in grids, storage & flexible generation. Read more of the key findings in the press release → https://iea.li/48AJeSf Explore IEA’s full Renewables 2025 report, freely available on our website → https://iea.li/3Ww4MYB And to learn more, join the report's lead author Heymi Bahar & me for the LIVE launch event from 11:00 CEST → https://iea.li/48j7kR9