The bearer of this week’s good tidings is Yale graduate Michael J. Coren (left) of Quartz, which is designed by its experienced founders to deliver information primarily to users of tablet and mobile then to website readers.
To summarise: the World Economic Forum (WEF) reported in December that the renewable energy future has arrived – solar and wind is now the same price or cheaper than new fossil fuel capacity in more than 30 countries.
Coren reports that Michael Drexler, who leads infrastructure and development investing at the WEF, issued a statement adding that renewable energy is not only a commercially viable option, but a compelling investment opportunity with long-term, stable, inflation-protected returs.
In 2016, utilities added 9.5 gigawatts (GW) of photovoltaic capacity to the US grid, making solar the top fuel source for the first time in a calendar year, according to the US Energy Information Administration’s estimates. The US added about 125 solar panels every minute in 2016, about double the pace last year, reports the Solar Energy Industry Association.
But global investment in renewable energy still lags behind levels needed to avoid potentially catastrophic global warming, according to the United Nations. Global renewable investment last year was $286 billion, or 25% of the $1 trillion goal set by nations at the Paris climate change accord.
As prices for solar and wind power continue to fall, two-thirds of all nations will reach the point known as “grid parity” within a few years, without subsidies. Renewable energy technology, especially solar and wind, has made great gains in efficiency in recent years with advances in manufacturing processes and economies of scale considerably reducing production costs
Solar photovoltaic systems have seen a reduction of up to 22% for every doubling in production capacity and price compression of 80% since 2009, according to the International Renewable Energy Agency (IRENA) citing EPIA, 2011a and Kersten 2011. Its working paper is part of a set of five reports on solar photovoltaics, wind, biomass, hydropower and concentrating solar power that address the current costs of these key renewable power technology options. Wind turbine prices have fallen by more than 30% over the past three years. Solar is projected to fall to half the price of electricity from coal or natural gas within a decade or two. That milestone has already been reached in some places. In August, energy firm Solarpack contracted to sell solar electricity in Chile at just $29.1 per megawatt hour, 58% below prices from a new natural gas plant.
It is estimated that more than 30 countries have already reached grid parity without subsidies, and around two thirds of the world should reach grid parity in the next couple of years. If electricity costs were to rise by 3% annually, 80% of the global market would reach grid parity in the next couple of years, according to Deutsche Bank. A search produced the Deutsche Bank 2015 report: Solar grid parity in a low oil price era and the map above. Countries that have already reached grid parity include those in which demand is rising at a fast pace (e.g. Chile, Mexico) or insolation is high (e.g. Brazil, Australia).
Dolf Gielen, Director, Innovation and Technology, stresses in the preface to the Irena report that though in recent years there have been dramatic reductions in renewable energy technologies’ costs as a result of R&D and accelerated deployment policy-makers are often not aware of the latest cost data.
Many will share his hope that presenting this data will inform the current debate about renewable power generation and assist governments and key decision makers to make informed decisions on policy and investment.