The IEA urge more rapid rollout of clean energy technologies, says this will “reduce the operating costs of the global energy system by more than half over the next decade”

### Rapid Rollout of Clean Technologies Makes Energy Cheaper, Not More Costly

A new special report by the International Energy Agency (IEA) reveals that accelerating the transition to clean energy technologies can significantly lower energy costs and alleviate the cost of living pressures. The report, “Strategies for Affordable and Fair Clean Energy Transitions,” highlights how advancing towards net zero emissions by 2050 not only requires additional investment but also reduces the operating costs of the global energy system by more than half over the next decade compared to maintaining current policy settings. This transition results in a more affordable and equitable energy system for consumers.

The report shows that clean energy technologies, such as solar PV and wind, are often more cost-competitive over their lifespans compared to conventional fuels like coal, natural gas, and oil. For instance, solar and wind are now the cheapest options for new electricity generation. Additionally, while electric vehicles (EVs) might have higher upfront costs, they usually lead to savings through lower operating expenses. Similarly, energy-efficient appliances like modern air conditioners provide significant cost benefits over their lifetimes.

However, unlocking these savings requires substantial upfront investment, particularly in emerging and developing economies where clean energy investments lag due to perceived risks and limited access to finance. The report underscores the need for governments to make clean energy technologies more accessible to those who struggle with these initial costs.

**One major barrier to clean energy investment is the current global energy system’s distortion caused by fossil fuel subsidies. In 2023, governments spent about $620 billion subsidizing fossil fuels, compared to just $70 billion on consumer-facing clean energy investments. This disparity makes it harder to invest in clean energy transitions.**

The advantages of a rapid transition to renewables extend to consumers, as renewable energy sources like solar and wind typically have lower operating costs than fossil fuels, leading to more predictable and stable electricity prices. Currently, around half of consumer energy expenditure is on oil products, with another third on electricity. As the transition progresses, electricity prices are expected to become the main benchmark, replacing oil as the dominant fuel source by 2035. This shift is facilitated by the increasing adoption of EVs, heat pumps, and electric motors in transport, buildings, and industry.

IEA Executive Director Fatih Birol emphasized that accelerating clean energy transitions is cost-effective for governments, businesses, and households. Delaying action would only lead to higher costs in the future. The report highlights the importance of supporting poorer households, communities, and countries to participate in the clean energy economy, ensuring that the benefits of clean energy are widely distributed.

During the global energy crisis in 2022, consumers spent nearly $10 trillion on energy, averaging over $1,200 per person. This figure represents a 20% increase from the previous five-year average, disproportionately affecting the most vulnerable populations.

To improve the uptake of clean energy technologies, the report recommends several actionable measures. These include delivering energy efficiency retrofit programs for low-income households, requiring utilities to fund efficient heating and cooling packages, making highly efficient appliances more accessible, providing affordable clean transport options, supporting public transport and second-hand EV markets, replacing fossil fuel subsidies with targeted cash transfers for vulnerable groups, and using carbon price revenues to address social inequities arising during the transition.

Addressing these measures is crucial to overcome existing inequalities in the energy system, where many people still lack access to affordable and sustainable energy technologies. The report stresses the importance of policy interventions to make clean energy accessible and to protect consumers from potential price shocks and energy security risks during the transition. Adequate investments in grid resilience, flexibility, and digital security are necessary to mitigate these risks and ensure a smooth transition to a more electrified energy system.