Energy transition has reached tipping point, UN report says

With renewable prices plummeting and the cost of new renewable power projects lower than fossil fuels in 91% of cases, the global energy transition has “irreversibly crossed a positive tipping point”, argues the UN in a new report.

“Fossil fuels are running out of road. The sun is rising on a clean energy age. Just follow the money,” UN Secretary General António Guterres said at the start of a special address today (July 22) at the UN Headquarters.

According to the UN’s Energy Transition Report 2025, produced in collaboration with the International Energy Agency, the IMF, IRENA, the OECD and the World Bank, solar and wind are now almost always the least expensive — and the fastest — option for new electricity generation. 

Solar is now 41% cheaper than fossil fuels for power generation on average, while offshore wind is 53% cheaper. And a separate report released by IRENA today shows that 91% of new renewables projects commissioned last year were more cost-effective than any new fossil fuel alternatives.

Investments in fossil fuels ‘sabotaging economies’

The plummeting costs of solar and wind energy have made them the fastest growing sources of electricity in history: in 2024, renewables made up 92.5% of all new electricity capacity additions and 74% of electricity generation growth.

Highlighting these results, Guterres said that even Texas – the heart of the American fossil fuel industry – is now a leading renewables player, “because it makes economic sense”.

“And yet fossil fuels still enjoy a 9 to 1 advantage in consumption subsidies globally – a clear market distortion. Add to that the unaccounted costs of climate damages on people and planet – and the distortion is even greater. Countries that cling to fossil fuels are not protecting their economies – they are sabotaging them,” the Secretary-General warned.

The UN report argues that the world now has an “unprecedented moment of opportunity” to invest in the policies, frameworks, and infrastructure needed to capitalise on falling renewable costs, growing manufacturing capacity, and abundant resources to fully unlock the energy transition.

‘The economics have won out’

Bill Hare, CEO of Climate Analytics, agrees: “The economics have won out, [fossil fuels] simply won’t survive in a competitive market. Any investment in new fossil fuels now is a fool’s gamble, while joining the race to renewables can only bring benefits – not just jobs and cheaper energy at stable prices, but energy independence and access where it’s needed most.”

Hare also deplored projects to develop new gas resources in Western Australia ad Brazil, which he says “risks slowing down the uptake of renewables as well as overshooting 1.5°C Paris Agreements limit”.

The report comes after the first year of growth in bank financing to fossil fuels since 2021, and as many oil and gas companies continue to pursue new exploration and extraction.

“While the success of renewables shows the world’s energy system can turn rapidly towards a safer climate, the need and potential is there to go even faster, if governments work with the market to accelerate the energy transition in line with the Paris Agreement’s 1.5°C warming limit. All governments must send a clear signal in their upcoming NDCs that their energy future is based on renewables and back this up by ending fossil fuel subsidies and investing in the grids of the future,” urged Hare.