LONDON (Reuters) – Plunging costs of renewables mark a turning point in a global transition to low-carbon energy, with new solar or wind farms increasingly cheaper to build than running existing coal plants, according to a report published on Tuesday.

The International Renewable Energy Agency (IRENA) said the attractive prices of renewables relative to fossil fuel power generation could help governments embrace green economic recoveries from the shock of the coronavirus pandemic.

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“We have reached an important turning point in the energy transition,” Francesco La Camera, director-general of IRENA, said in a statement.

Although scientists say the world needs to stage a much faster transition to mitigate the worst impacts of climate change, the annual report by the Abu Dhabi-based agency shows that wind and solar are increasingly competitive on price alone.

More than half of the renewable capacity added in 2019 achieved lower power costs than the cheapest new coal plants, the report found.

Auction results also suggest that the average cost of building new solar photovoltaic (PV) and onshore wind power now costs less than keeping many existing coal plants running, reinforcing the case for phasing out coal, the report said.

The authors also calculated that the world could save up to $23 billion of power system costs per year by using onshore wind and solar PV to replace the most expensive 500 gigawatts of coal-fired power, mostly found in China, India, Ukraine, Poland, South Korea, Japan, Germany and the United States.

Such a switch would also reduce global carbon dioxide emissions by about the equivalent of 5% of the total CO2 emissions in 2019, the report found.

Next year, up to 1,200 GW of existing coal capacity could prove more expensive to operate than the cost of building new utility-scale solar PV farms, the report found.