World on brink of climate breakthrough: Fossil fuel era is “running out,” says UN chief António Guterres, stressing that “the sun is rising on the age of clean energy.” Guterres urges countries to direct their support to low-carbon energy, while its an optimistic tone represents a significant change versus his previous, more urgent warnings, such as about an "era of global boiling."

The economic imperative of renewables

A key reason for this optimism is a compelling economic reality: more than nine out of ten (91 %) global renewable energy projects are now cheaper than fossil fuel-based alternatives. A message The International Renewable Energy Agency (IRENA) reports that solar power is about 41% cheaper than the cheapest fossil fuel alternative, and electricity generation from offshore wind is less than half that of fossil fuels.

The cost of renewable technologies has fallen thanks to their widespread deployment, a huge focus on low-carbon manufacturing in China and growing investment in the sector, which reached $2 trillion last year. That is $800 billion more than was invested in fossil fuels and represents a 70% increase over the past decade. IRENA Director-General Francesco La Camera confirmed that “cost competitiveness of renewables is today’s reality”, offering a clear path to affordable, secure and sustainable energyBill Hare of the think tank Climate Analytics added that any investment in new fossil fuels is a “crazy bet,” while a race to renewables can only bring benefits such as jobs, cheaper and more stable energy, energy independence and access where it is most needed.

In 2024, new offshore wind projects were the cheapest source of renewable electricity, with a global weighted average LCOE (Levelised Cost of Electricity) of $0.034/kWh. Solar photovoltaic (PV) systems followed at $0.043/kWh and hydropower at $0.057/kWh. In comparison, the global average LCOE for coal was $0.073/kWh and for combined cycle gas turbines (CCGT) was $0.085/kWh.

Broader benefits for society and security

António Guterres stressed that for countries seeking energy security against geopolitical threats and lower costs for consumers amid a global cost-of-living crisis, renewables are a clear choice. “The biggest threat to energy security today is fossil fuels. They leave economies and people vulnerable to price shocks, supply disruptions and geopolitical unrest,” he said. “There are no price shocks on sunlight. No embargoes on wind.”

In 2024, renewables helped globally save $467 billion in fossil fuel costsIn addition to financial savings, renewables displace emissions of carbon dioxide and harmful air pollutants that are linked to respiratory and heart diseases. For example, China saved $179.8 billion in fossil fuel costs and gained another $261.1 billion in air pollution-related health benefits.

Persistent challenges on the path to clean energy

Despite the clear benefits, progress in renewables is not guaranteed. Fossil fuel interests remain strong in many countries, with clean energy incentives being cut in the US and new coal-fired power plants still planned in China. Rising geopolitical tensions, trade tariffs and material supply constraints also threaten to slow the momentum and raise costs.

Cost of capital remains a key barrier in high-risk markets. Financing capital-intensive renewable projects has a significant impact on LCOE, especially in regions with higher risk premiums. For example, in Africa, financing costs accounted for the majority of the LCOE for offshore wind, while in Europe, capital expenditure dominated. Other challenges include bureaucratic hurdles such as permitting delays and grid connection bottlenecks, which limit cost reductions in the EU and the US. The concentration of supply chains, particularly in China, also poses vulnerabilities.

The future and role of assistive technologies

The total installed cost of solar PV systems is expected to fall below $600/kW by 2026, while the cost of onshore wind is likely to stabilize between $850 and $1,000/kW. The falling cost of battery storage – by 93% from 2010 to 2024 – and the development of hybrid systems (combining renewables with batteries) are key factors improving the economics of renewables and their ability to deliver reliable power. These hybrid systems are increasingly approaching price parity with fossil fuel power plants in key markets. Digitalization is further improving operational efficiency and reducing operation and maintenance costs.

The path to a fully clean energy future requires not only the rapid deployment of renewables, but also significant investment in supporting infrastructure, particularly grid expansion and energy storage. Countries are urged to submit strong national greenhouse gas emission plans by September, prioritizing support for low-carbon energy.

It's like a car switching from smoky gasoline engines to quiet electric ones. While the transition requires investment in charging stations and infrastructure modifications, the benefits are clear: cheaper to operate, cleaner air, and much less dependence on volatile fuel markets. The world is no longer just following a trend, but is moving on a more economically viable and stable path. Spring