OT_115: IRENA (2025) — Renewable Power Generation Costs in 2024 (narrative report, companion to the RD_003 datafile)

OT_115: IRENA (2025) — Renewable Power Generation Costs in 2024 (narrative report, companion to the RD_003 datafile)

Source

https://www.irena.org/publications/2025/Sep/Renewable-Power-Generation-Costs-in-2024 — original source (opens in a new tab; the file is not redistributed)

IRENA (2025) — Renewable Power Generation Costs in 2024 (narrative report)

The prose + methodology companion to the RD_003 datafile. Its value to the project is what the Excel file does NOT carry: IRENA's financing/WACC assumptions (regional WACC, standardised real-WACC path, the minimum-WACC-floor formula), the learning-rate + cost-elasticity table, short-term (2025–2029) CAPEX projections (solar PV → ~USD 388/kW, onshore wind → ~USD 861/kW), the avoided-fossil-fuel-cost narrative (USD 467 bn globally in 2024; Australia USD 5.0 bn), and the Australia solar+wind+battery hybrid LCOE of USD 0.051/kWh — the closest Oceania community-hybrid cost benchmark in the corpus. Headline cost levels (LCOE/TIC/battery) match RD_003 and are re-stated here as prose. Read verbatim → data_quality: verified (region-level WACC chart-reads flagged).

Summary

IRENA’s annual flagship report on the cost of renewable power, the written companion to the RD_003 datafile. It documents 2010–2024 total installed cost (TIC), capacity factor and levelised cost of electricity (LCOE) for seven renewable technologies plus utility-scale battery storage, and — unlike the datafile — sets out the methodology, financing assumptions and forward projections behind those numbers. The 2024 headline: 91% of newly commissioned utility-scale renewable capacity delivered power below the cheapest new fossil alternative; onshore wind (USD 0.034/kWh) remained the cheapest renewable source, ahead of solar PV (USD 0.043/kWh) and hydropower (USD 0.057/kWh); utility-scale battery storage fell 93% since 2010 to USD 192/kWh; and renewables avoided an estimated USD 467 billion in fossil fuel costs in 2024. For Neobiome the report’s distinctive contributions are the financing-cost machinery (regional WACC, the standardised real-WACC path used in the LCOE model, and the minimum-WACC-floor formula), the learning-rate/cost-elasticity table by region and technology, the 2025–2029 CAPEX projections, and an Australia hybrid (solar+wind+battery) LCOE of USD 0.051/kWh — the nearest Oceania analogue to a community renewable-plus-storage system. It sits directly alongside RD_003 (its datafile), OT_021 (Fraunhofer LCOE) and OT_033 (Lazard) in the international LCOE-benchmark cluster.

Key claims

- claim: "On an LCOE basis, renewables remained the most cost-competitive option for new electricity generation in 2024: 91% of newly commissioned utility-scale renewable capacity delivered power at a lower cost than the cheapest, newly installed fossil-fuel-based alternative. New utility-scale onshore wind (global weighted-average LCOE USD 0.034/kWh) remained the cheapest renewable source, followed by solar PV (USD 0.043/kWh) and hydropower (USD 0.057/kWh). All TIC and LCOE values in the report are expressed in 2024 real USD."
  source_location: "Executive Summary, Highlights, p.14; restated Foreword p.3 and Figure S1 p.16"
- claim: "Table S1 — TIC / capacity factor / LCOE by technology, 2010 → 2024 (2024 USD). Solar PV: TIC 5,283 → 691/kW (−87%), CF 15% → 17%, LCOE 0.417 → 0.043/kWh (−90%). Onshore wind: 2,324 → 1,041/kW (−55%), 27% → 34%, 0.113 → 0.034/kWh (−70%). Offshore wind: 5,518 → 2,852/kW (−48%), 38% → 42%, 0.208 → 0.079/kWh (−62%). CSP: 10,703 → 3,677/kW (−66%), 30% → 41%, 0.402 → 0.092/kWh (−77%). Hydropower: 1,494 → 2,267/kW (+52%), 44% → 48%, 0.044 → 0.057/kWh (+30%). Geothermal: 3,083 → 4,015/kW (+30%), 87% → 88%, 0.055 → 0.060/kWh (+9%). Bioenergy: 3,082 → 3,242/kW (+5%), 72% → 73%, 0.086 → 0.087/kWh (+1%)."
  source_location: "Table S1, p.14"
- claim: "Year-on-year (2023 → 2024) the global weighted-average LCOE rose slightly for some technologies — solar PV +0.6%, onshore wind +3%, offshore wind +4%, bioenergy +13% — and fell for others: CSP −46%, geothermal −16%, hydropower −2%. This marks a plateau after a decade of steep declines ('solar and wind energy prices have begun to stabilise – a natural sign of market maturity')."
  source_location: "Executive Summary Highlights, p.14; Foreword p.3"
- claim: "Global renewable power capacity additions in 2024 reached a record 582 GW (+19.8% vs 2023, the highest annual expansion since records began in 2000), bringing total installed renewable capacity to 4,443 GW. Solar PV led with 452.1 GW (77.8% of additions), followed by wind at 114.3 GW. Achieving the COP28 'UAE Consensus' goal to triple capacity to 11,000+ GW by 2030 requires annual additions well over 1,000 GW in the latter half of the decade."
  source_location: "Executive Summary, 'Annual renewable power capacity additions set a new record', p.15"
- claim: "Utility-scale battery storage (BESS) total installed cost declined ~93% between 2010 and 2024, from USD 2,571/kWh to USD 192/kWh (source BNEF 2024a). Over the same period annual gross BESS deployment rose from ~0.1 GWh to 169 GWh. In 2024 the global LCOE for BESS averaged USD 104/MWh, with leading US and China projects at ~USD 90/MWh for 1–4-hour configurations; BNEF projects BESS LCOE below USD 100/MWh in 2025 and up to a further 50% reduction by 2030."
  source_location: "Enabling technologies / Battery cost trajectories, p.56–57 (USD 2,571 → 192/kWh, 169 GWh, USD 104/MWh, USD 90/MWh); Executive Summary p.14 (93% decline)"
- claim: "In 2024 IRENA's weighted-average cost-of-capital (WACC) assumptions ranged from 3.8% in Europe to 12% in Africa, reflecting country risk and macroeconomic conditions prevailing in 2023. Illustrative structural contrast: onshore wind LCOE was similar in Africa (USD 0.051/kWh) and Europe (USD 0.052/kWh), but in Europe LCOE was driven mainly by capital expenditure whereas in Africa financing costs accounted for the majority share. Per IRENA's method the WACC for year y is based on macroeconomic data from y−1."
  source_location: "Executive Summary, 'Cost of capital remains a key barrier', p.23; footnote 10 p.23"
- claim: "Weighted-average cost of capital (WACC) by region, 2024 (Figure 1.13, chart-read, approximate). Oceania: onshore wind ~3.9%, solar PV ~3.9%. Africa: solar PV ~12.0%, onshore wind ~10.8%. Asia: onshore wind ~3.8%, solar PV ~6.2%. Europe: onshore wind ~4.0%, solar PV ~4.7%, offshore wind ~3.7%. IRENA notes its cost-of-capital assumptions are 'relatively conservative', and that 2024 WACC fell vs 2023 due to global monetary easing. ⚠ These regional values are extracted from a bar chart, not a table — approximate; the verbatim text range (3.8%–12%) is exact."
  source_location: "Figure 1.13 'Weighted average cost of capital (WACC) for key regions, 2024', p.41 (bar-chart values)"
- claim: "Standardised LCOE assumptions used where project-level WACC data are unavailable (Table A1): economic life — wind power 25 yr, solar PV 25 yr, CSP 25 yr, hydropower 30 yr, biomass for power 20 yr, geothermal 25 yr. Real WACC path for technologies/countries not covered by the benchmark tool: OECD and China 7.5% in 2010 falling to 5% in 2020; rest of the world 10% in 2010 falling to 7.5% in 2020. Hydropower uses the minimum-WACC floor (Box A.2)."
  source_location: "Annex I, Table A1 'Standardised assumptions for LCOE calculations', p.202"
- claim: "Minimum WACC floor (Box A.2): Minimum WACC Floor = 80% × Cost of Debt + 20% × Cost of Equity, where Cost of debt = (global risk-free rate + country default spread + lender margin) × (1 − tax rate) and Cost of equity = global risk-free rate + equity risk premium + country premium. The floor assumes an 80% debt share and excludes all technology-specific premiums, deriving a lower bound for the cost of capital. Default WACCs of 5% (OECD/China) and 7.5% (rest of world) can underestimate capital costs in high-risk markets (e.g. Argentina's 7.5% default vs Damodaran's 12% minimum for 2024)."
  source_location: "Annex I, Box A.2 'Minimum WACC adjustments', p.203"
- claim: "Learning rates and cost elasticities by region (Table 1.1). Solar PV learning rate: World 33.8%, Oceania 35.3%, OECD 37.5%, Europe 49.1%, North America 28.8%, Asia 26.0%, Africa 21.9%, South America 18.9% (cost elasticities 0.50–3.20). Onshore wind learning rate: World 25.0%, North America 32.7%, Europe 32.4%, Oceania 32.4%, OECD 31.9%, South America 16.2%, Eurasia 14.9%, Asia 14.4%, Africa 9.6%. Offshore wind: World 15.7%, OECD 16.0%. Learning rate = % reduction in TIC per doubling of cumulative capacity; cost elasticity = sensitivity of annual additions to TIC changes."
  source_location: "Table 1.1 'Learning rates and cost elasticities associated with variable technologies in key regions', p.59; Box 1.8 methodology p.60"
- claim: "Short-term CAPEX projections (2025–2029, learning-curve based). Over the next five years global total installed costs are expected to reach approximately USD 388/kW for solar PV, USD 861/kW for onshore wind and USD 2,316/kW for offshore wind. Regional detail: solar PV TIC to fall below USD 400/kW in Europe and Asia (>USD 600/kW elsewhere); onshore wind converging to USD 1,100–1,300/kW in most regions (USD 750–850/kW in Asia); offshore wind close to USD 3,000/kW in Europe by 2029. Projections are 'indicative, rather than predictive' and cannot account for policy shifts or supply-chain shocks."
  source_location: "Short-term CAPEX projections 2025–2029, p.60; Box 1.8 caveat p.60"
- claim: "Avoided costs. In 2024 renewables helped avoid an estimated USD 467 billion in fossil fuel costs globally (Figure 1.10). Country estimates of annual avoided fossil-fuel costs (Table S2, 2024, USD billion): China 179.8, Brazil 28.3, Germany 16.4, Australia 5.0; with avoided air-pollution damages of China 261.1, Germany 6.0, Brazil 3.9, Australia 1.9. Worked US example: 1,057 TWh renewable generation → USD 24.1 bn avoided fuel + USD 21.5 bn avoided air-pollution damages = USD 45.6 bn in one year (assuming 30% coal / 70% gas displacement)."
  source_location: "Executive Summary p.14 (USD 467 bn) and p.24 (US USD 45.6 bn, Table S2); main text 'Avoided fossil fuel costs' Figure 1.10, p.37"
- claim: "Hybrid (generation + storage) system cost evidence. In the United States, 17 operational hybrid projects (4,486 MW solar PV + 7,677 MWh battery) achieved a weighted-average LCOE of USD 0.079/kWh — aligned with the midpoint of combined-cycle gas (USD 0.077/kWh) and below coal (USD 0.119/kWh). In Australia, eight hybrid projects combining solar, wind and battery storage (412.2 MW generation + 188.4 MWh storage) reported a significantly lower weighted-average LCOE of USD 0.051/kWh."
  source_location: "Enabling technologies, hybrid systems, p.57 (US 17 projects USD 0.079/kWh; Australia 8 projects USD 0.051/kWh)"
- claim: "LCOE methodology and boundary. IRENA's LCOE is 'the price of electricity required for a project where revenues would equal costs, including making a return on the capital invested equal to the discount rate'. It is a first-order, deliberately simplistic metric applied across technologies/countries; more detailed DCF approaches (taxation, subsidies, incentives) are used by developers but are 'beyond the scope of this report'. LCOE is built from project-specific TICs, capacity factors and O&M costs, using 'all-in-OPEX' (including insurance and asset-management costs). The WACC benchmark tool (IRENA/IEA Wind/ETH Zurich) uses WACC = [E/(D+E)]×Ce + [D/(D+E)]×Cd×(1−T); the cost-of-debt benchmark takes the global risk-free rate as the current US 10-year government bond at 3.96% plus a country risk premium."
  source_location: "Annex I 'LCOE' definition and boundary, p.198–199; WACC benchmark formula p.205 (risk-free 3.96% p.205)"

Neobiome Intelligence relevance

This report’s marginal value over the RD_003 datafile is the cost machinery, not the headline numbers (which RD_003 already carries). Five things it gives the NI energy/finance calc layer:

1. A defensible financing-cost basis for the LCOE cells. RD_003 flagged that IRENA “does not isolate WACC by country in the headline tables” — this report closes that gap. It gives the standardised real-WACC path (OECD/China 7.5%→5%; rest-of-world 10%→7.5%), the regional WACC (Fig 1.13; Oceania ~3.9% chart-read for both PV and onshore wind), and the minimum-WACC-floor formula (80% debt / 20% equity). For an NI cost cell this means the international LCOE anchors can be re-derived at an NZ-appropriate discount rate rather than inherited at IRENA’s regional WACC — the single most important recalibration lever, since renewable LCOE is dominated by cost of capital. Advances (does not fully close) the NZ-WACC side of RT_110.
2. The Australia solar+wind+battery hybrid at USD 0.051/kWh (8 projects, 412.2 MW + 188.4 MWh) is the nearest thing in the corpus to an Oceania community renewable-plus-storage benchmark. It sits well below the NZ marine/island microgrid envelope (Stewart Island 20.8–27.9 c/kWh, LIT_068; Rakiura ~24 c/kWh, LIT_033) because it is grid-scale Australian PV+wind, not off-grid island diesel-displacement — use it as the utility-scale hybrid floor, not a small-community design point.
3. Learning rate + cost elasticity table (Table 1.1) — the full regional matrix, adding cost elasticities and Africa/N-America/S-America rows to the partial set already in RD_003. Confirms the RD_003 values (Solar PV World 33.8%, Oceania 35.3%; onshore wind World 25%, Oceania 32.4%) verbatim, and supports the bracketed-scenario approach (IRENA empirical ~34% PV LR vs Fraunhofer’s conservative 15%, OT_021) for any NI long-horizon cost forecast.
4. Short-term (2025–2029) CAPEX projections — solar PV → ~USD 388/kW, onshore wind → ~USD 861/kW, offshore wind → ~USD 2,316/kW. Gives NI a near-term forward trajectory (not just the 2024 snapshot in RD_003), explicitly flagged by IRENA as “indicative, rather than predictive”.
5. BESS LCOE (not just CAPEX) — global USD 104/MWh in 2024, ~USD 90/MWh for 1–4-hour US/China projects — complements the RD_003 storage CAPEX floor (USD 192/kWh) with a levelised-storage figure.

What does NOT transfer to NZ (unchanged from RD_003): no standalone NZ row — “Oceania” is Australia-weighted utility-scale; the sub-USD-200/kWh storage and USD 0.051/kWh hybrid assume Australian/mainland-China supply-chain pricing and 10s–100s of MW project scale; NZ community-scale (<1 MWh storage, 100s kWp–low MWp generation) lands materially above these floors. The value here is the methodology and financing structure, applied to NZ-specific CAPEX/demand, not the Oceania cost levels transplanted directly.

Research targets

Resolved

• RT_112 (RESOLVED → this page): IRENA (2025) Renewable Power Generation Costs in 2024 narrative report retrieved and read verbatim. Delivers what RT_112 sought — full LCOE/WACC methodology (Annex I, Table A1, Box A.2 minimum-WACC floor, Box 1.8 learning-curve method), financing-cost assumptions (regional WACC Fig 1.13, standardised real-WACC path), country case studies (China, India, Brazil, US, Australia), and the percentile-banding approach (5th/weighted-average/95th project-level bands, documented throughout the LCOE sections and Annex I). Companion to RD_003.

Documents to retrieve

• (Already tracked) RT_113 — BNEF Battery Price Survey (source of the USD 2,571 → 192/kWh battery series and the USD 104/MWh BESS LCOE cited here); subscription-gated. Priority: medium.
• Not raised as a new RT: the granular country- and technology-specific real after-tax WACC values (Figure A1 here) trace to IRENA (2023) The cost of financing for renewable power (“IRENA, 2023a”) — the dedicated cost-of-capital methodology publication behind the WACC benchmark tool (expert elicitation + IRENA/IEA Wind/ETH Zurich survey, Q3–Q4 2021). Folded into the open RT_110 (NZ-WACC recalibration) as its upstream method reference rather than minted as a separate target.

Research gaps

• (Updates RT_110, not new) — this report supplies the financing/WACC methodology the RD_003 anchor lacked, so an NZ-specific LCOE can now be re-derived at an NZ discount rate. RT_110 stays Open pending an actual NZ-only project-level WACC + CAPEX recalibration; the Oceania WACC (~3.9%) and standardised OECD path (5%) are defensible interim inputs but are not NZ-measured.

Notes

Primary agency report, read in full via pdftotext -layout → data_quality: verified. This is the narrative companion to the RD_003 datafile, NOT a duplicate: RD_003 is the 140-sheet Excel number file; this is the 216-page written report (ISBN 978-92-9260-669-5). Same title, same publication year (2025), same underlying cost database — but the report carries the methodology, financing assumptions, forward projections and case studies that the datafile omits, which is precisely what RT_112 was raised to retrieve. Headline cost levels re-stated here (LCOE, TIC, battery) match RD_003’s verified figures.

⚠ Chart-read values flagged: the region-level WACC in the “WACC by region, 2024” key_claim (incl. Oceania ~3.9%) are read off Figure 1.13’s bar chart, not a table — approximate. The load-bearing figures used for NI (WACC text range 3.8%–12%, standardised WACC path Table A1, minimum-WACC floor Box A.2, learning-rate Table 1.1, CAPEX projections, battery 93% decline, Australia hybrid USD 0.051/kWh, US hybrid USD 0.079/kWh) are all table or prose and exact.

⚠ Minor cross-source rounding: RD_003’s storage bullet reads “~92% drop” (2,571 → 192/kWh); this report states the same series as “93%”. Both are faithful to source (2,571 → 192 = −92.5%); IRENA rounds to 93% in the 2025 report. No conflict.

⚠ context: both matches RD_003 — the report feeds NI cost cells (D01 CAPEX/WACC/learning-rate inputs, I01 financing structure) and the thesis energy-transition narrative (91% competitiveness, USD 467 bn avoided fossil cost, structural fossil decoupling). Named authors (Dardour, Ayres, Zamora) recorded in frontmatter notes; frontmatter author uses the canonical corporate citation “International Renewable Energy Agency” to match the report’s own citation string and RD_003.

Connections

Links to

Sources (5): LIT_033 · LIT_068 · OT_021 · OT_033 · RD_003

Referenced by

Sources (2): RD_003 · RD_037

EDT domains (1): D01: Renewable Energy & Storage Systems

SSI indicators (1): I01: Financial & Economic Self-Sufficiency