For the first time, IRENA’s flagship Renewable Power Generation Costs 2025 report includes a dedicated assessment of ocean energy, reflecting the sector’s growing maturity.

IRENA’s analysis confirms that wave and tidal energy are moving towards commercial deployment and are set to follow the same cost-reduction pathway as established renewable technologies. Like offshore wind before them, wave and tidal now need market visibility to unlock investment, accelerate deployment and reduce costs through scale.

Strengthening energy security with home-grown renewable power

Ocean energy offers unique value to future power systems. Wave and tidal generate home-grown renewable electricity at different times than wind and solar, strengthen energy security and improve power system resilience. As electricity systems become increasingly reliant on variable renewables, these complementary generation profiles become even more valuable.

Ocean energy is following a proven path to cost reduction

Europe is already laying the foundations for the next phase of scale-up. By 2030, a pipeline of 16 pre-commercial wave and tidal farms – representing around 196 MW of new capacity and some 200 devices – is expected to kick-start the industrial rollout of the sector.

IRENA’s report highlights that, at an equivalent stage of development, today’s wave and tidal costs are already lower than those of other renewable technologies at the same point in their commercial journey. As deployment increases, costs are projected to continue falling to around USD 120/MWh for wave energy and USD 140/MWh for tidal stream once 2 GW has been deployed. This is based on aggregated learning across several technologies. However, cost reductions for a single technology are set to be greater at the same installed capacity.

These technologies are expected to benefit from the same drivers that transformed offshore wind: innovation, industrialisation, larger projects, economies of scale and lower financing costs.

Vast global market confirms major scale-up opportunities

The report complements Ocean Energy Europe’s recently published Global Resource Assessment, which showed that ocean energy could supply 13% of global electricity demand and 21% of current EU consumption. Together, the two reports demonstrate that ocean energy combines a vast global resource with a credible pathway to large-scale deployment.

Valentin Dupont, Policy Director at Ocean Energy Europe, commented:

“IRENA’s report shows that market visibility drives investment, deployment and cost reductions. This virtuous cycle brought wind and solar to record levels of deployment. Ocean energy has the same business model and is set to follow a similar cost reduction trajectory with scale. National revenue support schemes are now needed to expand Europe’s pipeline of pre-commercial farms, speed up deployment and industrialise the sector.”

Read the full report here: Renewable Power Generation Costs in 2025