by Maria Wirth
As the private sector pushes cost reduction and storage technology, renewable energy sources are increasingly competitive and clean electricity market prices are striking record lows. Particularly developing economies are rapidly expanding their capacities, largely driven by solar and wind. But when compared to fossil fuel installations, impressions quickly darken. The Green Energy Revolution may not be taking over just yet.
In 2014, global renewable electricity generation accounted for more than 22 percent of the overall generation, up by 7 percent from 2013, mainly driven by wind and solar, according to the Tracking Clean Energy Progress 2015 report published by the International Energy Agency (IEA). “OECD non-member economies continued to dominate…with their share increasing to around 55%,” the report reads. China contributed almost a quarter of global generation. Leading worldwide, Chinese 2014 renewable energy investments rose by 39 percent to a record $83.3 billion, followed by the United States. The People’s Republic made half of global onshore wind addition in its move away from large-scale hydro. Renewables are expanding rapidly in the developing world, with China, Brazil and India ranking among the top ten investing countries. The Paris-based energy watchdog saw absolute investments almost at level with the developed economies.
Europe simply does not have the same growth prospects any more as its economies stagnate, but energy efficiency is also increasing. The European Union’s statistics office, Eurostat, unveiled a 3.2 percent drop in electricity demand from 2013 to 2014. Meanwhile, India is likely to follow China’s expansive scale, still sitting at a per capita energy consumption of 0.7 tonnes of oil equivalent (toe) in 2012, minuscule compared to 6.8 toe in the U.S., but with both population and per capita demand growing rapidly, according to the IEA.
Almost 50 percent of new solar photovoltaic (PV) generation has come from Asia, but utility-scale solar PV plants provided at record low costs have been installed in several other “locations with good irradiation levels and high electricity spot prices,” such as several Latin American countries and the United States, according to the IEA report. In Dubai, a 200 megawatt (MW) long-term solar power purchase agreement (PPA) was signed in January, providing energy at a record 5 cents per kilowatt hour. German solar plants currently deliver at below 9 cents, with nuclear at 11 cents. In the last five years alone, PV costs have steadily declined by 75 percent.
Globally, onshore wind is still deemed most attractive with three times the generating capacity of solar, according to the Financial Times. The IEA reported that, “New turbine technology with larger rotor diameters has unlocked projects, especially in Europe and the United States.” PPAs were signed as low as 2 cents per kilowatt hour (KWh) in the US. Both solar and onshore wind have reached price parity with conventional sources in many regions, while bioenergy, offshore wind, geothermal power, solar thermal electricity (STE) and ocean energy are lagging behind, widening the confidence gap.
In addition to record low costs, the intermittent nature of renewables, dependent on sunlight, wind, or current, may cease to worry infrastructure planners as new technological innovations for energy storage continue to come to light. The Tesla rechargeable lithium-ion battery, derived from Electric Vehicle (EV) batteries, will go into mass production this summer. The home version can store enough power to last for up to five hours at full use. The EV manufacturers Nissan and Daimler have followed suit, transferring their own powerful batteries to stationary use, available also in industrial sizes.
The United Nations Framework Convention on Climate Change (UNFCCC) suggests their application in development. In a world, in which 1.3 billion people are still cut off from electricity, “there is vast potential for technologies that can bring power to regions that cannot economically be reached by the grid.” Peripheral communities can leapfrog a connection to central power lines through solar-plus-battery installations. Power mixes are another strategy for cheap, uninterrupted clean energy supply. In the remote village of Shantiniketan in West Bengal, researchers from the United Kingdom and India are building a low-cost decentralized hybrid power plant of solar, bio-mass and hydrogen. Innovations like these may facilitate a surge in installations in the near future.
Currently, however, installed capacity of renewable energy sources lies below its boosted potential. The plunge of crude oil prices in the second half of last year was not the reason. Analysts broadly agree that clean transportation sectors compete with oil, but not clean electricity. However, the Earth Policy Institute revealed that in 2014, “governments worldwide still subsidized the fossil fuel industry with over $600 billion …five times the subsidy that went to renewables.” And according to the IEA, “low-priced coal was the fastest-growing fossil fuel in 2013.” The agency stated that, “policy uncertainty and retroactive policy signals are the main barriers to deploying renewables in [OECD] member countries,” while in non-OECD countries particularly “issues concerning financing, grid connection and integration are contributing to the slow-down in renewable power deployment.” Further, antiquated, unprepared grid structures in the U.S. and U.K. or already congested grids in Japan have delayed the grid connection of several fully completed renewable energy plants.
Last year, renewables accounted for 48 percent of worldwide net added power capacity, excluding large hydro, a 17 percent increase from 2013 and the third consecutive year above 40 percent, according to a joint report released in March, by the United Nations Environmental Program (UNEP) and Bloomberg New Energy Finance. The $242.5 billion absolute investments in renewables dwarfed additional fossil fuel installations worth $132 billion, but still scored below the $289 billion gross investment in “dirty” energy sources. Maria van der Hoeven, IEA Executive Director, calls this a “sluggish pace” as capacities are “falling short…of limiting climate change to a global temperature rise of 2°C.” In fact, “not one of the technology fields tracked is meeting its objectives,” she declared in a statement, referring to the generation target of 10,225 clean terawatt hours by 2025.
Meanwhile, cities, even countries and multi-million-dollar enterprises have set targets to go 100 percent renewable. Vancouver and Aarhus are two of those set to achieve this by 2030, , Hawaii by 2045, while Costa Rica made the news earlier this year when it produced enough renewable energy to power the entire nation for 75 days. Apple took two years to transform to 100 percent renewable energy in all its US operations and data centers, as well as 87 percent of its global operations. Google, Yahoo, Facebook, eBay, Amazon and Microsoft have also prominently embarked upon the green energy track. In addition, early June saw the UN climate change conference in Bonn, where governments and technical experts convened to prepare for the showdown at the Paris Climate Change Conference in December. States will have to pick up the pace on the renewable energy sources, but also utilize the large potential within energy efficiency, as the cleanest energy ultimately remains that which is not consumed.