By Olakunle Oke
The Organization of Petroleum Exporting Countries (OPEC) has raised fresh concerns over the hidden costs of renewable energy, warning that the global transition to wind and solar power may be more expensive than commonly perceived.
In a new opinion piece on the global energy outlook, OPEC Secretary General, Haitham Al Ghais, cautioned that while renewables are becoming a major force in global electricity generation, the “true costs” of their integration are often underestimated.
He explained that the commonly used measure of the Levelized Cost of Energy (LCOE) does not fully account for the infrastructure, storage, and backup systems required to keep electricity grids stable when renewables fluctuate.
Figures from OPEC’s World Oil Outlook (WOO) 2025 project that global electricity demand will surge by 85 per cent, rising from 31,345 terawatt hours (TWh) in 2024 to 57,556 TWh by 2050. Wind and solar are expected to dominate this growth, expanding by over 500 per cent to 26,013 TWh by mid-century.
While the global average LCOE in 2024 was reported at $39/MWh for solar and $48/MWh for onshore wind, OPEC’s adjusted analysis puts the real system cost much higher. Once grid integration, transmission, and storage are factored in, the cost rises to $77/MWh for solar, $72/MWh for onshore wind, and $127/MWh for offshore wind.
Al Ghais also flagged another challenge: the mineral-intensive nature of renewable technologies. With demand for critical minerals like lithium, cobalt, and rare earths rising — and supplies concentrated in just a few countries he warned that costs could spiral further, undermining recent price declines in renewable technologies.
Offshore wind, he noted, is particularly vulnerable to supply chain disruptions and price shocks.
Despite the challenges, Al Ghais acknowledged that renewables will remain an important part of the global energy mix. However, he argued that oil and gas are still essential in ensuring stability, particularly as demand from data centres, Artificial Intelligence (AI), and households continues to soar.
“The pursuit of lower emissions is vital,” he said. “But the world must adopt a balanced, all-energy approach. Renewables will remain crucial, but oil and gas provide the reliable foundation required to meet humanity’s electricity needs.”
