The world has an "unprecedented moment of opportunity" to invest in the energy transition from fossil fuels to "clean energy", taking advantage of "spectacular cost declines" in the latter, a UN report found today.
The energy transition is "the defining economic imperative and opportunity of this decade", the report found. The world "is poised for a breakthrough in the rapid and widespread transition" from fossil fuels to renewable energy, but political and economic barriers remain, it said.
It sets out key areas of action — including "policy coherence, clarity, and certainty" from governments, improved infrastructure such as grid upgrades, and mobilising finance for developing countries, in order to further the global energy transition. It also recommends that new energy demand, such as that from artificial intelligence (AI) and data centres, is met by renewable power.
Solar and wind power are now almost always the cheapest and fastest options for new power generation, and those projects typically have shorter lead times than new coal and gas plants, the UN noted. The global average electricity generation cost in 2024 from solar and onshore wind was 41pc and 53pc cheaper, respectively, than the lowest-cost new fossil fuel-fired power plant, it said.
"Solar and wind can be deployed faster, cheaper and more flexibly than fossil fuels ever could," UN secretary-general Antonio Guterres said today.
Solar and wind "have become the fastest growing sources of electricity in history", the UN said. The shares of fossil fuels and renewables in global installed electricity capacity "now stand at almost 1:1", it said, given the rapid rise in renewables capacity additions over the past decade.
Spending on "clean energy" — renewables, electric vehicles, nuclear power, electricity grids, storage, heat pumps, "low-emissions fuels" and "efficiency improvements" — reached $2 trillion in 2024 and looks set to be higher this year at $2.2 trillion, according to energy watchdog the IEA.
But the UN warned on regional disparity and, in some cases, a lack of political momentum.
"Countries that cling to fossil fuels are not protecting their economies — they are sabotaging them… missing the greatest economic opportunity of the 21st century", Guterres said.
Government subsidies for fossil fuels "remain high, while effective carbon pricing remains insufficient", the report found. And while advanced economies have been able to decouple economic growth from emissions, there is a dearth of accessible funding for the energy transition for developing nations.
Several studies have put the economic cost of inaction on climate change far ahead of the cost of a global energy transition.
Guterres today called on countries to submit climate plans, aligned with Paris Agreement goals, in September. This year's UN Cop 30 climate summit is scheduled for November in Belem, Brazil.
