Is renewable energy better than fossil fuel?
Executive summary
Renewables are rapidly undercutting fossil fuels on cost and deployment: utility-scale renewables outcompeted fossil alternatives in about 91% of new projects in 2024 and global clean-energy investment reached roughly $2.2 trillion in 2024 — about $800 billion more than fossil-fuel investment [1] [2]. At the same time, renewables are meeting the bulk of electricity growth and in 2025 overtook coal generation for the first half of the year, but fossil fuels still supply a large share of total energy and emissions remain near record levels [3] [4].
1. A market story: costs and investment are decisively shifting
Recent data show that most new large renewable projects are cheaper than fossil alternatives — IRENA found around 91% of utility-scale projects commissioned were more cost‑effective in 2024, with solar and onshore wind 41% and 53% cheaper on average than the lowest-cost fossil options respectively [1]. Investment flows mirror that economic shift: about $2.2 trillion went into clean energy, efficiency and electrification in 2024 — roughly double the $1.1 trillion going to fossil fuels — a gap the UN secretary‑general highlighted as evidence renewables now dominate new capital [5] [2].
2. Deployment: rapid growth, record additions, and regional leaders
Renewables are growing faster than any major energy source and are projected to add capacity at unprecedented scale — global renewable power capacity is expected to double by the end of the five‑year window cited in reporting, with solar and wind supplying the lion’s share of new generation [6] [7]. Ember’s mid‑year and global reports document renewables expanding by hundreds of terawatt‑hours in 2025 and, in the first half of 2025, renewables generation surpassed coal for the first time on record — renewables reached 5,072 TWh versus coal’s 4,896 TWh [3].
3. System impacts: electricity growth met mostly by clean power, but gaps remain
Multiple sources show renewables now claim roughly three‑quarters of electricity growth, weakening the historical link between rising demand and rising fossil generation [8] [7] [4]. Yet the energy system still faces balancing and reliability challenges: critics and some analysts argue that wind and solar alone cannot cover all demand variability without complementary storage, grid upgrades, or other firm low‑carbon sources — a point made by skeptics who say fossil plants remain as backup where storage and 24/7 clean alternatives are limited [9].
4. Economics vs. politics: declining costs but uneven policy
Economics are pushing the transition — falling technology and storage costs, economies of scale, and competitive bids are cited repeatedly as decisive [1] [10]. But politics and regional differences matter: some governments continue to support fossil fuels and geopolitical events can keep fossil markets active; the IEA and other analysts note that while market momentum makes a peak in fossil demand likely, timing varies by scenario and by country [11] [6].
5. Climate and emissions: promising signs, not a solution yet
Analysts report that rising renewables have slowed the growth rate of emissions and could cause fossil fuel demand to peak in coming years, but total CO2 from human activity remains near record levels and fossil fuels still supply a substantial share of primary energy [11] [4]. Ember and other think tanks caution that although electricity-sector fossil use flatlined in 2025 in some analyses, global emissions only fell marginally and faster or broader deployment is required to meet 1.5°C pathways [3] [4].
6. Counterarguments and limits: storage, demand growth, and transition speed
Voices skeptical of a near‑term total replacement stress limitations: rapid demand growth for electricity (driven by cooling, EVs, AI/data centres) creates room for all sources, and until long‑duration storage, transmission and flexible grid management scale up, some fossil capacity may be needed for reliability [5] [9]. Proponents answer that batteries have plummeted in cost and a combination of short‑term storage, grid upgrades and diversified clean firm power can meet most needs — a debate highlighted in industry and opinion pieces [1] [10].
7. Bottom line: “better” depends on the metric — cost, emissions, or reliability
If “better” means cost and investor preference today, renewables are winning: cheaper project-level costs, record installations, and larger investment flows favor wind, solar and storage [1] [5]. If “better” is defined by immediate, universal replacement of fossil fuels for 24/7 supply everywhere, sources show technical and system challenges remain and the pace of decline in total fossil use will vary by country and policy choices [9] [11]. Policymakers’ decisions — how fast they fund grids, storage, and equitable transition measures — will determine whether the economic advantage of renewables translates into a sustained, global shift away from fossil fuels [6] [2].
Limitations: reporting cited here focuses on electricity and recent deployment; available sources do not mention detailed outcomes for other sectors (industrial heat, aviation) in this dataset (not found in current reporting).