Batteries push renewables toward round-the-clock power

That matters because utilities and large corporate buyers have often treated renewables as cheap but weather-dependent resources, not as direct substitutes for conventional power plants.

A new report by the International Renewable Energy Agency (IRENA) presents hybrid systems, built from renewables and battery storage, as a growing option for customers that need clean power with a defined level of reliability.

The agency’s modelling estimates that solar-plus-storage in strong resource regions can deliver firm electricity at about $54 to $82 per megawatt-hour. IRENA compares that with about $70 to $85 per megawatt-hour for new coal in China and more than $100 per megawatt-hour for new gas globally.

That is the change they want policymakers to notice.

Battery costs drive the shift

Battery economics appear to be the biggest change. The agency that says storage costs have fallen 93% since 2010, a steeper drop than the 87% decline for solar PV and the 55% fall for onshore wind.

Lower storage costs matter because batteries let renewable projects hold excess output and release it when electricity is more valuable. They can also help developers make better use of limited grid connections.

Firm solar-plus-storage costs have dropped sharply since 2020. In the best-performing locations, the agency projects further declines that could push costs below $50 per megawatt-hour by 2035.

Data centers add demand

The report also points to a new class of power buyers. Data centers and artificial intelligence operations need large amounts of electricity with little tolerance for interruption, while clean-fuel producers need high utilization to keep costs down.

The United Arab Emirates’ Al Dhafra complex shows how solar and batteries can be contracted as firm supply, with output of 1 gigawatt priced at about $70 per megawatt-hour.

In its country comparisons, IRENA estimates 2025 firm wind-plus-storage costs at about $59 per megawatt-hour in Inner Mongolia and roughly $88 to $94 per megawatt-hour in Brazil, Germany and Australia.

Market rules lag behind

The report’s broader argument is that the cheapest firm renewable systems will often combine solar, wind and storage rather than rely on one technology alone. Mixed resources can reduce storage needs because solar and wind output often peak at different times.

IRENA also discusses broader flexibility tools, including transmission, demand response and dispatchable renewable generation, as part of reliable power systems.

The policy test is whether markets will pay for reliability. IRENA says auctions, grid rules, storage incentives and time-matched clean-energy accounting, which measures whether clean power is available during the same hours it is used, could help hybrid renewables move from spreadsheet projections to projects built at scale.

Sources: IRENA – 24/7 renewables: The economics of firm solar and wind

This article is made and published by Kenneth Glad, who may have used AI in the preparation