In 2024, the global transition to renewable energy is accelerating, with wind and solar power making significant strides in cost competitiveness, according to Wood Mackenzie’s latest Levelised Cost of Electricity (LCOE) report.
Key findings indicate that solar photovoltaic (PV) and onshore wind are rapidly becoming more cost-effective than traditional fossil fuels. The global average LCOE for fixed-axis solar PV is $66/MWh, while single-axis tracking PV averages slightly lower at $60/MWh. Onshore wind remains competitive with an average LCOE of $75/MWh, though offshore wind, particularly floating systems, still faces higher costs.
In the Asia Pacific region, a 16 percent drop in LCOE for renewables is driven by a 21 percent reduction in capital costs, making solar PV the most cost-effective power generation option.
Europe saw modest improvements, with Southern Europe benefiting the most from solar PV cost reductions.
Meanwhile, North America’s renewables market reported a 4.6 percent drop in LCOE, positioning solar and wind as major players in the future energy mix, despite short-term challenges for offshore wind.
Latin America and the Middle East and Africa also show strong reductions in renewable LCOE, driven by falling capital costs and easing supply chain pressures. By 2060, solar PV in the Middle East and Africa is expected to achieve an LCOE as low as $19.7/MWh, emphasizing its growing cost competitiveness.