The new era in the electricity market appears to have already begun, as Renewable Energy Sources (RES) combined with energy storage systems in batteries are now emerging as more economical than traditional power plants.

According to a new report from the International Renewable Energy Agency (IRENA), electricity generation from photovoltaics and solar parks with simultaneous use of batteries can now ensure reliable 24-hour electricity supply, especially in areas with high sunshine and strong wind potential.

Dramatic drop in the cost of technologies

The report’s figures show a dramatic deceleration in costs in recent years.

From 2010 to 2024, installation costs fell:

  • by 87% in photovoltaics
  • by 55% in hydro wind
  • by 93% on storage batteries

This development has led to a drastic reduction in the overall cost of electricity generation from installations combining renewable energy sources and storage.

In particular, power generation costs have fallen from levels above $100 per megawatt-hour in 2020 to around $54 to $82 per MWh by 2025 for regions with favorable weather conditions.

The example of Al Dhafra in the United Arab Emirates

As a prime example, IRENA refers to the large energy complex Al Dhafra in the United Arab Emirates.

The project will combine:

  • Power photovoltaics5,2 GW
  • energy storage 19 GWh in batteries

This will enable it to consistently provide 1 GW of clean electricity, at an estimated cost of about $70 per MWh.

Projections through 2035

The agency’s estimates call for a further deceleration in installation costs by:

  • 30% by 2030
  • 40% by 2035

This is expected to drive the cost of electricity generation below €50 per megawatt hour, further enhancing the competitiveness of renewable energy sources against conventional forms of energy.

Francesco La Camera: “The argument about unreliability is no longer valid”

IRENA director general, Francesco La Camera, particularly focused on the strategic importance of renewable energy, especially in a period of geopolitical uncertainty.

He said. Today, renewables can provide reliable electricity 24 hours a day. As oil and gas markets remain exposed to geopolitical turbulence, including ongoing disruptions in the Strait of Hormuz, we must protect our economies with resilient renewable energy systems.

The economics of the entire energy system have changed: the battery revolution has lowered costs while accelerating developments in storage. The advantage of renewable energy is not only economic, but also strategic, as it enhances resilience, stability and energy security in times of crisis.”

The remarks of Evangelos Mytilineou

The statements of the chairman of METLEN were in the same vein, Evangelos Mytilineou, during the “Energy Transition Summit – East Med & Southeast Europe” conference held in Athens.

The head of the company stressed that developments in the Persian Gulf further reinforce the importance of RES, not only for environmental reasons but especially for energy security.

As he pointed out, renewables can act as a shield against energy supply disruptions and price increases caused by geopolitical crises.

At the same time, he stressed that the big challenge for the coming years remains the development of adequate and economically competitive energy storage solutions, to limit sharp increases in electricity prices when renewable energy sources are not sufficient to meet demand.

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