A new report from the International Renewable Energy Agency (IRENA) concludes that renewable energy systems combining solar panels, wind turbines, and battery storage can now provide reliable, 24-hour electricity at prices that undercut new fossil fuel plants in many regions. The findings challenge a long-standing argument from the fossil fuel industry that renewables cannot deliver consistent power when the sun is not shining or the wind is not blowing.
According to IRENA, the cost of solar power paired with batteries in areas with strong sunlight and wind resources ranges from approximately €50 to €75 per megawatt-hour. This compares with roughly €60 to €75 per megawatt-hour for new coal plants in China and over €88 globally for new gas-fired power. The agency examined so-called “firm” renewable systems—integrated setups designed to provide continuous electricity.
Battery costs drive the transformation
The sharp decline in battery storage costs has been a key enabler. Since 2010, battery storage costs have fallen by 93%, while solar panel costs dropped 87% and onshore wind costs fell 55%, IRENA reports. This trend is expected to continue, with some large-scale solar-and-battery projects potentially delivering continuous electricity for less than €45 per megawatt-hour by 2035 in the best-performing regions.
IRENA also notes that combining wind, solar, and batteries reduces exposure to geopolitical shocks, such as disruptions at the Strait of Hormuz, a critical chokepoint for global oil shipments. This is particularly relevant as Europe grapples with energy price volatility linked to Russia’s invasion of Ukraine and ongoing instability in the Middle East.
European benefits already visible
The report arrives at a time when Europe is actively rethinking its energy dependence. Advocacy group Positive Money found that renewables helped cut electricity prices in several European countries by nearly 25% between 2023 and 2025. Another study revealed that consumers in Denmark, Finland, France, Sweden, and Slovakia could save up to €8.5 billion on energy bills this year due to their cleaner electricity mixes, while countries more reliant on fossil fuels face higher costs.
Solar power alone saved Europe €3 billion in March by reducing gas imports, according to an analysis by SolarPower Europe. The group estimates total savings could exceed €67 billion if gas prices remain elevated. These developments align with broader EU efforts to accelerate the energy transition, as highlighted by the EU Climate Chief’s call for a radical energy shift amid the third oil shock.
However, challenges remain. The surge in renewable capacity has led to negative electricity prices across Europe, which can undermine investment incentives. Policymakers are also weighing measures such as suspending methane penalties to shield energy supply during the crisis, while the IMF urges the EU to sharpen energy relief for vulnerable households.
IRENA’s findings suggest that the argument over renewables’ reliability is shifting. Battery storage allows electricity generated during sunny or windy periods to be stored and released when demand peaks or supply dips, reducing the need for fossil-fuel backup plants. This makes round-the-clock renewable power increasingly attractive for energy-intensive sectors like artificial intelligence and data centres.
As Europe navigates the twin pressures of energy security and climate goals, the economics of renewables are becoming harder to ignore. The IRENA report provides fresh evidence that the continent’s push toward a cleaner, more resilient energy system is not only environmentally necessary but increasingly cost-effective.
