Solar and wind have become the cheapest sources of new electricity generation worldwide. As renewable penetration rises, however, the central challenge of the energy transition is increasingly one of adequacy and flexibility – ensuring that clean electricity is available when and where it is needed. This report addresses that challenge by introducing firm levelised cost of electricity (firm LCOE) – a transparent, project-level benchmark for assessing the cost of delivering continuous, reliable electricity from co-located solar PV, onshore wind and battery energy storage systems.

The analysis shows that the cost of firm renewable electricity has declined rapidly across all major technologies and markets. In high-quality solar and wind resource regions, co-located hybrid systems can already deliver round-the-clock electricity at costs competitive with - and in many cases below - those of new fossil-fuel generation. China currently defines the global cost floor, while costs in Brazil, India, South Africa, Australia, and the Gulf region are declining rapidly towards fossil-fuel cost parity.

The report identifies key drivers of firm renewable costs – technology performance, resource quality and system configuration – and examines the policy levers that are proving decisive in translating cost competitiveness into deployment at scale. It concludes that the technologies are maturing, the costs are falling and the commercial demand is growing. The pace at which firm renewable electricity is deployed will be among the most consequential determinants of the global energy transition in the decade ahead.

Report by the International Renewable Energy Agency