Renewable energy now cheapest source of power

RENEWABLE energy has become the cheapest source of new electricity generation in most parts of the world.

According to the International Renewable Energy Agency’s (Irena) report, titled ‘24/7 Renewables: The Economics of Firm Solar and Wind’, fossil fuel generation has become more expensive than renewable energy sources.

“The competitive advantage of renewables over fossil generation has therefore widened in both directions simultaneously through falling renewable costs and rising fossil costs,” the report reads.

The report says utility-scale solar photovoltaic and onshore wind power both cost about US$40 per megawatt-hour (about N$654) globally in 2025.

That is less than half the benchmark cost of new combined-cycle gas turbine plants, which exceeded US$100 per megawatt-hour (about N$1 636).

Irena attributes the increase in gas-fired electricity generation costs to rising turbine demand that has outpaced manufacturing capacity, as well as fuel market disruptions that pushed global gas prices higher.

“Gas prices, which account for a large share of the cost of gas-fired generation, have added further upward pressure following supply disruptions that recently affected global liquefied natural gas trade and sent European gas benchmarks to multi-year highs,” the report says.

The Ministry of Industries, Mines and Energy last month announced that Namibia plans to boost domestic electricity generation to 80% by 2030, up from the current 45%.

The country currently imports electricity from South Africa, Zambia, and Zimbabwe.

Currently, renewables account for 21% of the country’s electricity mix, with a target of reaching 70% by 2030.

United Nations secretary general António Guterres says the current energy crisis has shown an overdependency on fossil fuels and not enough use of renewables.

“The worst energy crisis in decades has exposed the true cost of fossil fuel dependence. But another path is now possible.

Renewable power is increasingly the most affordable, reliable and secure option. Let us accelerate the transition to finally deliver clean, homegrown power to people everywhere,” he says.

Green Hydrogen Commission spokesperson Jona Musheko says Namibia must accelerate investment in renewable energy to shield itself from global fossil fuel shocks and strengthen energy security.

“The world has seen how overdependence on fossil fuels exposes countries to price volatility, supply disruptions and geopolitical instability. Namibia remains vulnerable to these risks,” he said.

Musheko said Namibia has some of the world’s strongest renewable resources, including high solar irradiation and strong coastal winds.

He pointed to projects already being advanced by NamPower, including the 44MW Diaz Wind Farm, the 80MW Omburu Solar PV II expansion, the 120MW independent power producer solar programme, battery storage systems and new transmission infrastructure backed by the World Bank.

“Beyond electricity, renewables are also the foundation of Namibia’s emerging green hydrogen and green industrialisation ambitions,” he said.

Irena director general Francesco la Camera says the long-standing argument that renewables lack reliability no longer holds.

“Today, renewables can deliver reliable, round‑the‑clock power. As oil and gas markets remain exposed to geopolitical shocks, including ongoing disruptions in the Strait of Hormuz, we must insulate our economies with resilient renewable systems,” he says.

La Camera says the advantage of renewables is not only economic but also strategic as 24/7 renewable power is now cost-competitive with fossil fuels.

The report also shows that the economics of renewables are beginning to challenge existing fossil fuel plants – not only new projects.

In Egypt, Germany, Spain and the United Kingdom some wind-plus-storage projects have already fallen below the operating costs of existing coal and gas plants.

In Oman and the wider Gulf region, the report finds that solar-plus-storage is now competitive with gas-fired power, even where fossil fuels are produced domestically.

Solar power in those markets currently ranges between US$69 and US$80 per megawatt-hour (about N$1 128 to N$1 308).

Meanwhile, solar power costs in South Africa were estimated at between US$65 and US$80 per megawatt-hour (about N$1 063 to N$1 308), with projections suggesting costs could fall to US$38 to US$44 per megawatt-hour (about N$621 to N$719) by 2035.

Beyond cost, Irena says that the current geopolitical environment has strengthened the case for renewables as a source of energy security.

The report says countries with larger shares of renewable energy have generally experienced smaller electricity price shocks during periods of fuel market disruption, while economies that rely heavily on imported fossil fuels face greater pressure on inflation and public finances.

“Firm renewable electricity is priced at the cost of capital and technology rather than the cost of fuel,” the report reads.

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