Moving Toward One Energy Future Part 1: Cheaper and More Abundant Renewables

2017 may be the year that the world finally gets serious about climate change and embraces the vision that there is only one viable, sustainable energy future. Consensus about carbon emissions reductions was formed among the nations participating in the 2015 United Nations Climate Change Conference (COP21) in Paris. The commitments to a low-carbon future that emerged from Paris have now been translated into country-specific targets at COP22 in Marrakesh, Morocco. Together, these country targets lay out the road map by which the world’s people can collectively make aggressive reductions in carbon emissions and thereby achieve a manageable level of climate disruption.

Many milestones in renewable energy have been reached in the past few years. For example, the delivered cost of renewable energy, in many cases, is now cheaper than energy delivered from fossil-fuel sources; and the amount of renewable energy capacity additions now exceed non-renewable capacity additions.

Renewables are Getting Cheaper

In many parts of the world, we will see a big step forward as the renewable sector achieves unsubsidized price parity, and then undercuts non-renewable energy prices. This is already happening in some places. For example, solar PPAs in the U.S. have recently been signed at prices under $0.04/kWh. Recent wind PPAs have been even cheaper — as low as $0.02/kWh. And in UAE, an 800 MW solar bid came in just under $0.03/kWh; cheaper than new-build coal-fired electricity in that country.

This is good news for consumers and governments, but it also means that societies will need to manage changes in their infrastructure. Until now, energy supply has generally been controlled by governments and/or monopolies/oligopolies. However, because renewable power can be generated at small- as well as large-scale, we are all becoming suppliers and consumers. This new world of “prosumers” will require a much more responsive and intelligent management of the market.

As renewables deployment increases, countries or regions may be unable to generate renewable energy when it is needed or, at other times, may be unable to use all the renewable energy they are generating. Local production, demand management and energy storage can solve these problems


Explosion in Renewable Energy Production

It is important to understand the speed of change we have witnessed in the past 10 years. In 2004, there was around 3 GW of global solar power installed. There is now over 200 GW. For wind power, we solar, PPAhave gone from 48 GW to more than 400 GW in this same time period. It is important that we maintain flexibility in order to adjust to and benefit from new technologies.

The center of gravity for renewable energy deployment has switched from Europe, which has historically led the way, to other parts of the world. Southeast Asia, and in particular China, are presently deploying solar and wind power at incredible rates. In the U.S., the extension of tax credits is projected to foment rapid growth in renewable energy production over the next four-to-six years. And while India and the Middle East are areas where carbon emissions are rising fast, they are sleeping giants, given that both have massive renewable energy plans. European countries are expected to reduce non-renewable energy sources, despite projections that overall energy demand will increase, indicating a rise in renewables.


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