Choosing renewable energy was once purely an environmental decision. With far less carbon output and environmental destruction associated with these forms of energy compared to fossil fuels, committing to renewables meant committing to the planet.
However, a new report from the International Renewable Agency shows that by 2020, renewables will not only be cleaner than fossil fuels, they’ll also be cheaper. Solar, wind, hydropower, and geothermal power are becoming more common and have been steadily contributing to global electrical capacity. In the US, solar and wind energy has accounted for almost 95% of the 16.7GW of electricity capacity added in 2017. Likewise, the United Arab Emirates, a major oil producing Gulf country, recently invested $163 billion in hopes to reach the goal of producing at least 44% of the country’s electricity needs through renewables by 2050.
How Are Renewables Winning the Race Against Fossil Fuels?
The major drive for such success for renewable energy in the industry is the expected drop in the costs of installations as well as electricity production. This drop in turn will be due to technological development, competitive bidding systems, and the increase in experienced developers in the field. Currently, fossil fuels cost between $0.05 and $0.17 per kWh. When it comes to solar voltaic energy, the global average for the cost per kwh is $0.10. Onshore wind costs only $0.06, geothermal is at $0.07, and hydropower is coming in at around $0.05. These price points are within the range of fossil fuels, making them strong competitors. Although solar thermal and offshore wind are currently more expensive than fossil fuel, IRENA predicts a drop in price by 2020 to $0.06 and $0.10 per kwh for solar thermal and offshore wind respectively.
These estimates for future costs of renewables are based on data that was collected from 2010-2016, which demonstrated a tremendous decrease in cost. Solar photovoltaic cost decreased by 69% from 2010 to 2016 along with an 18% drop for onshore wind, placing them in the same range as fossil fuels. Residential solar PV systems costs dropped by two-thirds since 2010 due to the cut in prices of the PV modules. We should be seeing more installations of renewables which will lead to a drop in the investment costs as well the cost of electricity it produces in the upcoming years.
A Significant Shift in the Energy Paradigm
As renewable energy technologies continue to improve in efficiency and reliability while dropping in cost, they are making way for a greener future. Renewable energy will begin to dwarf the contribution of fossil fuels in the energy and power industry. “This new dynamic signals a significant shift in the energy paradigm,” said Adnan Z. Amin, IRENA Director-General. “These cost declines across technologies are unprecedented and representative of the degree to which renewable energy is disrupting the global energy system.”
Renewable Energy reliability was demonstrated when Tesla made headlines when its megawatt battery stabilized a power grid in south Australia from a coal plant failure in mere milliseconds. Moreover, during 2017, Britain generated twice the amount of electricity from wind than coal, making 2017 the greenest year for Britain. Renewable Energy has shown its capacity to produce enough energy to cover a big portion of the energy demand around the globe as well as being able to cover for fossil fuels when they fail.
Will the Future Be 100% Carbon Free?
As reliable and efficient renewables continue to thrive, there are still some limitations to them since their success is heavily dependent on weather conditions and geography. Solar thermal can be used heavily in the dessert, however they can be a few hundred miles away from a major city. It is also currently one of the more expensive options. Likewise, water or wind are not as abundant in some cities, preventing them from using resources like hydropower or wind energy. This gap in energy demand will be filled using resources like natural gas, cleaner fossil fuels or nuclear energy.
By 2050, the UAE is planning to supply 38% of its electricity through natural gas, 6% from nuclear, and only 12% from fossil fuels. As the use of fossil fuels drops, these companies can raise their prices since they will become the backup in cases of slacks or failures in electricity production by renewables.
How Can We Secure A Greener Future?
The increase in investment and installation of renewable technology is rapidly reducing the costs of these valuable energy production methods. According to Varun Sivaram, a member of the Council of Foreign Relation and an expert in solar power, there will be a drop of 50% for solar when a grid depends on supplying 15% of its electricity from solar. By 30%, he estimates a two-thirds drop in the costs of solar.
Investment in renewables and green technology is so critical for a carbon free future. However while some countries are investing billions in zero-carbon-emission power, the backward thinking of some leaders who are spending billions of dollars on buildinging oil pipelines instead, is taking us one step back.