More than half of the world’s coal-fired power capacity costs more to keep operating than it would cost to build new wind or solar, a new report out this week claims.

The share of renewable energy that achieved lower costs than the most competitive fossil fuel option doubled in 2020, according to the International Renewable Energy Agency (IRENA). 162 gigawatts (GW) or 62% of total renewable power generation added last year had lower costs than the cheapest new fossil fuel option.

The Renewable Power Generation Costs in 2020 report shows that costs for renewable technologies continued to fall significantly year-on-year. Concentrating solar power (CSP) fell by 16%, onshore wind by 13%, offshore wind by 9% and solar PV by 7%.

With costs at low levels, renewables increasingly undercut existing coal’s operational costs too, the report claims. In the United States for example, 149 GW or 61% of the total coal capacity costs more than new renewable capacity.

Retiring and replacing these plants with renewables would cut expenses by $5.6bn per year and save 332m tonnes of CO2, reducing emissions from coal in the United States by one-third. In India, 141 GW of installed coal is more expensive than new renewable capacity. In Germany, no existing coal plant has lower operating costs than new solar PV or onshore wind capacity, the report suggests.

Globally, over 800 GW of existing coal power costs more than new solar PV or onshore wind projects commissioned in 2021. Retiring these plants would reduce power generation costs by up to$32.3bn annually and avoid around 3 giga tonnes of CO2 per year, corresponding to 9%of global energy-related CO2 emissions in 2020.

The world had around 2,060 GW of coal plants in operation in 2020. The 1,137 GW identified by IRENA as uneconomic represents 55% of the total.

“Today, renewables are the cheapest source of power,” said IRENA’s director-general Francesco La Camera “Renewables present countries tied to coal with an economically attractive phase-out agenda that ensures they meet growing energy demand, while saving costs, adding jobs, boosting growth and meeting climate ambition.”

The Group of Seven (G7) nations pledged this month to rapidly scale up technologies and policies that accelerate the transition away from unabated coal capacity, including ending new government support for coal power by the end of this year.

Global investment in energy is set to rebound by nearly 10% in 2021 to $1.9trn, but energy transition spending needs to speed up much more rapidly to meet climate goals, a report from the International Energy Agency (IEA) earlier this month said.

The IEA report found that 2021 is on course to be the sixth year in a row that investment in the electricity power sector exceeds that in traditional oil and gas supply. However, not enough is going into clean energy, especially in emerging market and developing economies.

“The anticipated investment in clean energy technologies and efficiency in 2021 is encouraging but remains far below what’s required to put the energy system on a sustainable path. Clean energy investment would need to triple in the 2020s to put the world on track to reach net zero emissions by 2050,” IEA said.

Global power sector investment this year is estimated at $820bn, its highest ever level, after staying flat in 2020.

Renewables are dominating investment in new power generation and are expected to account for 70% of 2021’s total of $530bn spent on all new generation capacity.

The IEA launched a major warning to the energy industry last month, saying investors should not fund new oil, gas and coal supply projects if the world wants to reach net zero emissions by 2050.