For decades, fossil fuels held one decisive advantage over renewable energy: reliability. Solar panels stop producing after sunset, and wind turbines slow down on calm days. Modern economies, critics argued, cannot run on intermittent power. But that assumption is breaking down faster than expected.

The International Renewable Energy Agency says the economics of energy systems are undergoing a structural shift. In a new analysis, IRENA concludes that solar and wind power paired with battery storage can now deliver round-the-clock electricity at costs competitive with—and, in many regions, lower than—those of coal and natural gas.

“No one can talk anymore about whether renewables are economically viable or reliable,” IRENA Director-General Francesco La Camera told me. “The transition is happening and will happen with or without the naysayers.”

La Camera’s argument rests on a more fundamental shift than cost curves alone.

For the first time, IRENA has developed a globally comparable benchmark for round-the-clock renewable power: the Firm Levelized Cost of Electricity. It enables direct comparisons between renewable systems and fossil generation under equivalent reliability conditions.

The results are clear: in high-quality solar and wind regions, renewable systems are already cost-competitive with fossil fuels. Specifically:

  • Firm solar-plus-storage systems range from $54 to $82 per megawatt-hour.
  • Firm wind-plus-storage systems range from about $59 to $94 per megawatt-hour.
  • In China, the global cost floor is even lower, with some solar-plus-storage systems approaching $30 per megawatt-hour.
  • By contrast, new coal in major markets typically ranges from $70 to $85 per megawatt-hour, while new gas-fired generation can exceed $100.

“This is not theoretical anymore,” La Camera says. “We are looking at concrete systems delivering 24/7 electricity in a competitive way.”

Breaking Down The Baseload Myth

Once solar, wind, and storage are combined in optimized systems, the traditional distinction between intermittent and baseload power begins to break down. Battery storage costs have fallen by more than 90% since 2010, accelerating the shift. Furthermore, additional declines of around 30% by 2030 are expected, pushing the most competitive sites below $50 per megawatt-hour by the mid-2030s.

In La Camera’s view, the question is no longer whether renewables are dependable but whether fossil fuels can remain competitive in a system where reliability is no longer exclusive to them. He sees a long-term structural decline in fossil fuels, projecting they will make up just 20% of the total electricity mix by 2050, down from 70% today.

“I don’t consider fossil fuels the enemy,” he says. They will remain necessary throughout the energy transition.

While this transformation is driven by economics, it is accelerated by geopolitical instability. The war in Ukraine exposed the vulnerability of centralized gas-dependent systems, while tensions in the Strait of Hormuz and broader instability in the Middle East continue to highlight the risks embedded in global fossil fuel supply chains.

The resulting shipping disruptions and price shocks reinforce a structural reality: fossil systems are exposed to chokepoints that renewable systems are not—or at least, the end result is not as dramatic.

The response is increasingly a shift toward distributed generation, local storage, and systems designed for resilience rather than long-distance fuel transport. While it is easy—and complacent—to rely on traditional supply chains and technologies, it is more prudent to create options and hedge. And markets are doing just that.

“In moments of crisis, systems that are decentralized and fuel-free prove more resilient,” he says.

Beyond global shocks, the transition is also reshaping the geography of energy investment. La Camera points to Central Asia as one of the clearest early examples: A roughly $1 billion renewable energy project in the region required coordination across complex tariff systems and political constraints, utilizing a blended finance model that combines sovereign investment, multilateral lending, and private enterprise.

The Geopolitics Of Deployment

A similar pattern is emerging across parts of Africa , where coordinated efforts between development finance institutions and Gulf energy investors are enabling smaller, recurring renewable energy projects in markets previously off-limits. In both Africa and Central Asia, renewable deployment is doing more than changing how electricity is produced. It is also linking emerging markets more directly to global capital focused on the energy transition.

If cost and reliability are converging, the next constraint is infrastructure.

Electric grids, largely designed for centralized fossil generation, are impediments to renewable expansion. Without modernization, transmission bottlenecks—not generation capacity—will slow deployment. At the same time, energy demand is rising faster than expected, driven by electrification, industrial growth, and new loads such as data centers and artificial intelligence.

La Camera argues this is where renewables’ structural advantage becomes most important. They are not only cheaper but faster to deploy than most alternatives. In a system where demand is accelerating, he says, “you go for the solution that is less expensive and could take less time to be deployed.”

That speed advantage matters because grids, gas plants, and other centralized infrastructure can take years to build, while solar, wind, and storage can be rolled out much faster. As a result, he notes, renewable capacity is now growing faster than any other energy source, driven by both economics and construction speed.

The challenge is no longer simply to generate more clean energy, but to integrate it into electricity networks capable of absorbing it at scale.

That economic transformation has been reinforced by political alignment at the highest level of climate diplomacy. La Camera points to the COP28 agreement to triple global renewable energy capacity by 2030 as a key inflection point.

He credited IRENA's analytical work for helping establish the feasibility of that target, and noted the role of Sultan Al Jaber — COP28 President and chair of Masdar — in building political consensus around it. The outcome reflects the growing alignment between engineering and policymaking, which has helped accelerate commitments to renewable deployment worldwide.

Despite rapid deployment, energy demand is rising even faster than anticipated.

Electrification, industrial expansion, and structural shifts in both emerging and advanced economies are pushing consumption upward. At the same time, efficiency gains have lagged expectations, widening the gap between supply growth and total system demand. As a result, even record renewable deployment may not be enough to meet climate goals.

Demand will undoubtedly keep growing. The question, though, is how it will be met: through fossil-based systems exposed to price shocks and supply constraints, or through decentralized renewable programs that are cheaper and faster to deploy?

For more than a century, global energy systems were organized around a simple principle: centralized fuels transported over long distances to meet rising demand. That logic is now breaking down. As storage improves, costs fall, and renewables scale, reliability is no longer synonymous with fossil fuels. It is becoming a feature of clean energy systems instead.