The world’s electricity future is shifting toward a cleaner, greener reality.

A new report from the International Monetary Fund (IMF) shows that solar and wind energy will dominate global electricity production by 2050, replacing fossil fuels as the primary power source.

The report, The Economics of Decarbonizing Electricity Production, highlights the rapid advances in renewable technologies and their plummeting costs.

It’s an optimistic outlook for the planet, but the path ahead isn’t without challenges.

Renewables are already making waves. In 2022, 86% of all new electricity capacity worldwide came from clean energy sources.

Countries like Denmark and Lithuania now generate more than half their electricity from solar and wind, while Ethiopia and Iceland have achieved 100% renewable power grids thanks to hydropower.

According to the report, solar and wind energy costs have dropped dramatically over the past decade.

Solar power costs have fallen from $422 per megawatt-hour in 2010 to below $50 in 2020, making it one of the cheapest energy options globally. This affordability is driving rapid adoption.

Battery storage, a key to managing renewable energy variability, has become significantly cheaper. Costs have dropped by 82% in the past decade, enabling countries to store and balance intermittent solar and wind energy effectively. These breakthroughs are making large-scale renewable energy systems more feasible than ever.

But challenges remain. Solar and wind power depend on weather and daylight, which means they aren’t always reliable on their own.

The report emphasizes the need for investments in energy storage, smarter grids, and tools like dynamic pricing to address this variability.

Concerns also exist about the materials required for renewable energy infrastructure.

Solar panels, wind turbines, and batteries depend on transition metals like lithium and cobalt, which could face supply chain bottlenecks as demand grows. However, the report suggests that markets will likely adapt to meet this demand.

Other technologies, including carbon capture and storage (CCS), bioenergy, and nuclear power, are expected to play supporting roles. Yet these solutions face limitations, including high costs and environmental concerns, which make them less central to the global energy transition.

The report projects that renewables could account for 90–95% of electricity production worldwide by 2050.

Countries rich in hydropower and geothermal resources will use these to complement solar and wind, while technologies like CCS and nuclear will provide additional balance.

This dominance of renewables wasn’t always expected.

A decade ago, energy models predicted a much larger role for nuclear and CCS. However, rapid advancements in renewable technologies and their steep cost declines have shifted the focus to solar and wind as the most viable solutions.

The economic case for renewables is also compelling. The IMF argues that a renewable energy transition could save trillions of dollars globally compared to sticking with fossil fuels.

With lower operating costs and decreasing upfront investments, renewables are becoming the cleanest and cheapest option.

“We’re seeing a future where clean energy isn’t just the moral choice—it’s the logical one,” said Gregor Schwerhoff, the report’s author. “Renewables are transforming the economics of energy systems worldwide.”

The report clarifies that the work is still ongoing while the transition is underway.

Governments and industries must continue investing in infrastructure, technology, and international cooperation to maintain this momentum.

“We’ve made incredible progress, but this is only the beginning,” Schwerhoff said. “The choices we make today will define the energy systems of tomorrow.”