Report on Renewable Power Generation Costs and Alignment with Sustainable Development Goals

Executive Summary

An analysis of the International Renewable Energy Agency’s (IRENA) 2024 report on renewable power generation costs indicates that renewable energy sources, particularly solar and wind, remain the most cost-effective options for new power generation globally. This economic advantage is a critical driver for achieving multiple Sustainable Development Goals (SDGs), most notably SDG 7 (Affordable and Clean Energy) and SDG 13 (Climate Action). However, significant challenges related to financing, infrastructure, and policy persist, threatening the pace and equity of the global energy transition and impacting progress on SDG 10 (Reduced Inequalities) and SDG 17 (Partnerships for the Goals).

Economic Competitiveness and Contribution to Global Goals

Cost Superiority of Renewables

The report confirms the strong economic case for renewable energy, a cornerstone for achieving universal access to affordable energy as outlined in SDG 7. In 2024, the cost advantage of renewables over the cheapest fossil fuel alternatives was significant.

• Onshore Wind: Remained the lowest-cost source of new electricity at USD 0.034/kWh, making it 53% cheaper than fossil fuel options.
• Solar Photovoltaics (PV): Followed closely at USD 0.043/kWh, representing a 41% cost advantage.

The deployment of 582 GW of new renewable capacity in 2024 resulted in an estimated USD 57 billion in fossil fuel cost savings for that year alone, directly contributing to the economic sustainability targets within SDG 8 (Decent Work and Economic Growth).

Climate Action and Financial Impact

The large-scale adoption of renewables is fundamental to global climate mitigation strategies under SDG 13. The operational renewable capacity in 2024 is estimated to have averted up to USD 467 billion in fossil fuel costs, demonstrating a powerful synergy between climate action and economic benefit. Key findings include:

1. 91% of all new renewable capacity added in 2024 was more cost-effective than any new fossil fuel-fired generation.
2. These cost savings reinforce the financial viability of decarbonization pathways, making the transition to clean energy, as mandated by SDG 7, an economically rational choice for nations worldwide.

Impediments to an Equitable and Rapid Transition

Financing Disparities and Investment Gaps

Significant inequalities in financing conditions hinder the global energy transition, creating barriers for developing nations and undermining SDG 10 (Reduced Inequalities). The report highlights a stark contrast in the cost of capital, which directly impacts project feasibility.

• The levelized cost of onshore wind is comparable in Europe and Africa (approx. USD 0.052/kWh).
• However, the assumed cost of capital is vastly different: 3.8% in Europe versus 12% in Africa, due to perceived investment risks.

Addressing these financing gaps requires robust international cooperation and partnerships, as called for in SDG 17, to de-risk investments and ensure capital flows to regions where it is most needed.

Infrastructure and Policy Challenges

Progress is constrained by non-financial barriers, particularly the lack of adequate infrastructure and stable policy frameworks. These challenges directly relate to SDG 9 (Industry, Innovation, and Infrastructure).

• Grid Integration: Grid expansion is lagging behind renewable deployment, especially in G20 and Global South nations, creating bottlenecks.
• Permitting and Procurement: Inconsistent policies, opaque procurement processes, and permitting delays deter investment and increase project costs, particularly in Europe and North America.
• Supply Chains: Geopolitical shifts, trade tariffs, and raw material constraints present potential headwinds to continued cost reductions.

Innovation as a Catalyst for Progress

Technological Advancements and System Integration

Technological innovation continues to strengthen the business case for renewables, supporting the objectives of SDG 9. Advances in energy storage and system management are crucial for enhancing grid flexibility and reliability.

• Battery Energy Storage Systems (BESS): The cost of utility-scale BESS has fallen by 93% since 2010, reaching USD 192/kWh in 2024.
• Hybrid Systems: The combination of solar, wind, and storage, enhanced by AI-enabled tools, is improving overall system performance and efficiency.

Realizing the full benefits of these innovations requires parallel investment in modern, resilient infrastructure to support their integration, a key target of SDG 9.

Conclusion: A Call for Concerted Action

The IRENA report concludes that the global energy transition is irreversible and economically sound. The cost-competitiveness of renewables provides a clear pathway to achieving SDG 7 and SDG 13. However, the pace and fairness of this transition depend on overcoming critical barriers. Unlocking the full potential of renewables requires a concerted global effort focused on:

1. Enhancing International Cooperation (SDG 17): To close financing gaps and de-risk investments in the Global South.
2. Building Resilient Infrastructure (SDG 9): To support the rapid deployment of renewables and ensure grid stability.
3. Implementing Stable Policies: To provide investor confidence and streamline project development.

Addressing these areas will not only accelerate the energy transition but also ensure it is just and equitable, contributing to a broader spectrum of Sustainable Development Goals.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 7: Affordable and Clean Energy
• SDG 8: Decent Work and Economic Growth
• SDG 9: Industry, Innovation, and Infrastructure
• SDG 10: Reduced Inequalities
• SDG 13: Climate Action
• SDG 17: Partnerships for the Goals

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 7: Affordable and Clean Energy

  • Target 7.2: By 2030, increase substantially the share of renewable energy in the global energy mix.
    
    Explanation: The article is centered on the growth of renewable energy, stating that 582 GW of renewable capacity was added in 2024 and that “91% of all new renewable projects were more cost-effective than any fossil fuel-fired generation options.” This directly supports the goal of increasing the share of renewables.
  • Target 7.a: By 2030, enhance international cooperation to facilitate access to clean energy research and technology… and promote investment in energy infrastructure and clean energy technology.
    
    Explanation: The article highlights the need for investment, especially in emerging markets, and points to “inconsistent policies, opaque procurement processes, and weak financing structures” as deterrents. It calls for international cooperation to address these “financing gaps” and build infrastructure.

• SDG 8: Decent Work and Economic Growth

  • Target 8.4: Improve progressively, through 2030, global resource efficiency in consumption and production and endeavour to decouple economic growth from environmental degradation.
    
    Explanation: The article demonstrates improved resource efficiency by highlighting massive cost savings. It states that new renewable capacity in 2024 resulted in “fossil fuel savings estimated at USD 57 billion” and that renewables in operation helped avoid “up to USD 467 billion in fossil fuel costs,” decoupling economic activity from fossil fuel dependency.

• SDG 9: Industry, Innovation, and Infrastructure

  • Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure… with a focus on affordable and equitable access for all.
    
    Explanation: The article explicitly identifies infrastructure gaps as a major challenge, noting that “grid capacity constraints” and “permitting delays” are slowing momentum, particularly in G20 and Global South nations where “grid expansion is lagging behind renewable deployment.”
  • Target 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies.
    
    Explanation: The article focuses on the adoption of clean technologies like solar PV and onshore wind. It also discusses technological innovation in energy storage, noting the cost of battery energy storage systems (BESS) has “dropped 93% since 2010.”

• SDG 10: Reduced Inequalities

  • Target 10.a: Implement the principle of special and differential treatment for developing countries.
    
    Explanation: The article highlights significant financial disparities, noting that while the generation cost of onshore wind is similar in Europe and Africa, “African projects face much higher financing costs due to perceived investment risks.” It points out that IRENA’s assumed cost of capital was “3.8% in Europe to 12% in Africa,” indicating a clear inequality that hinders the energy transition in developing regions.

• SDG 13: Climate Action

  • Target 13.2: Integrate climate change measures into national policies, strategies and planning.
    
    Explanation: The entire article discusses the shift from fossil fuels to renewables, which is a primary strategy for climate action. The statement that “Clean energy is smart economics” and the focus on replacing fossil fuels implicitly supports the integration of these measures into economic and energy policies.

• SDG 17: Partnerships for the Goals

  • Target 17.3: Mobilize additional financial resources for developing countries from multiple sources.
    
    Explanation: The article stresses that the energy transition’s pace depends on addressing “financing gaps” and attracting capital, “particularly in emerging markets.” This points directly to the need for mobilizing financial resources for the Global South.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• For SDG 7 (Affordable and Clean Energy)

  • Indicator (Proxy for 7.2.1): Annual addition of renewable energy capacity.
    
    Data from article: “the addition of 582 GW of renewable capacity in 2024.”
  • Indicator: Cost of electricity by technology type.
    
    Data from article: Onshore wind at “USD 0.034/kWh” and solar PV at “USD 0.043/kWh.”
  • Indicator (Proxy for 7.a.1): Disparity in the cost of capital for clean energy projects between developed and developing regions.
    
    Data from article: “cost of capital varied from 3.8% in Europe to 12% in Africa.”

• For SDG 9 (Industry, Innovation, and Infrastructure)

  • Indicator: Cost reduction in key enabling technologies.
    
    Data from article: “The cost of battery energy storage systems (BESS) has dropped 93% since 2010, reaching USD 192/kWh for utility-scale systems in 2024.”

• For SDG 8 (Decent Work and Economic Growth)

  • Indicator: Annual cost savings from the displacement of fossil fuels by renewables.
    
    Data from article: “fossil fuel savings estimated at USD 57 billion” from new capacity and “up to USD 467 billion in fossil fuel costs” avoided by renewables in operation in 2024.

4. Table of SDGs, Targets, and Indicators

Source: solarquarter.com