The costs of renewable energy have fallen significantly in recent years, helping to advance the industry quickly. But apparently not quickly enough--in May of 2018 renewable energy represented about 15% of the total energy supply. Global sustainability goals, in contrast, have been set for it to represent 65% of the total supply by 2050.
"Key to the future of renewables is the speed at which innovations can be commercialized and the commitment to continue funding research and development."
What’s holding us back?
It depends on who you ask. Various experts cite an array of causes which include politics, misperceptions, a loss of tax incentives, and an overall lack of innovation. Regardless of the cause, the result is the same— renewable power plants are not where they need to be from a productivity and profitability perspective. Simply stated, there is not enough power being generated consistently at a low enough cost. And the financial challenge could become more substantial, especially in the US, with a number of federally subsidized programs no longer in place to prop up the emerging technologies.
In the area of wind power, for example, a major policy incentive—the federal production tax credit—expires in 2019. Newly built wind plants using production tax credits have proven cost-competitive with new natural gas plants in some parts of the US, especially in the “wind belt” that runs from Texas to North Dakota. However, new technology breakthroughs will be needed to drop the unsubsidized cost of wind energy below the projected cost of fuel for existing natural gas plants.
In order to succeed, these alternatives must make financial sense. Costs need to come down. And, the sources need to be more reliable.
Download The Future of Renewable Energy Relies on Innovations Focused on Increasing Output and Decreasing Costs White Paper to discover the various emerging technologies and processes that have been positioned to help increase productivity and profitability in renewable power plants, and the challenges facing the industry as a whole.
Where are we at today?
According to the US Energy Information Administration (EIA), in 2017 about 4.03 trillion kilowatt-hours (kWh) of electricity were generated at utility-scale facilities in the US. About 63% of this electricity generation was from fossil fuels, such as coal, natural gas, petroleum, and other gasses. About 20% was from nuclear energy, and about 17% was from renewable energy sources. Within the renewable energy category, three of the more promising technologies included hydropower at 7.4%, wind power at 6.3%, and solar power at 1.3%.
Globally, clean renewable energy has made better strides. In 2017, the World Economic Forum estimated that a fifth of the world’s electricity was produced by renewable energy. Even better was that costs came down. Between 2015 and 2016, not only did the number of renewable energy installations increase by 10% globally but the new plants in 2016 cost almost a quarter less.
The World Economic Forum further noted that, on a global scale, solar power provided the biggest boost, providing half of all new capacity, followed by wind power, which provided a third, and hydropower which gave 15%. 2016 was the first year in history that added solar capacity outstripped any other electricity-producing technology.
Currently, China and India are leading the industry with the steepest capacity installation targets over the next 10-15 years. This is largely due to concerns over excessive levels of pollution in many of their key cities. Despite the US withdrawal, the targets in the Paris Agreement are also still expected to be key drivers for future sector growth.
Clean energy costs decline while energy storage costs remain high
The big news is that the world has seen an unprecedented drop in the cost of producing clean energy in the last few years. In fact, it is becoming the cheapest source of power for more and more countries. Both solar and wind power have undergone an annual average percentage drop in the cost of production in the mid to high teens. In fact, the global weighted average levelized cost of electricity (LCOE) of utility-scale solar PV fell by 73% between 2010 and 2017. The average cost of electricity from onshore wind fell by 23% during that same time period.
The big challenge, of course, continues to be the identification of viable storage solutions to ensure that electric generation matches electric demand in real-time and, ultimately, achieves grid reliability. Unfortunately, energy storage remains expensive.
The future of wind power
It’s projected that new energy science and technological breakthroughs could cut the cost of wind energy in half by 2030, making it fully competitive with the fuel cost of natural gas. This assumes, however, that the US will continue to invest in research and development. The wind plant of the future will use a collection of technologies that allow wind power plants and the turbines within them to not only respond to the atmosphere as an efficient, integrated system but also to control the airflow within the plant to maximize power production.
Solar plants have a bright future
The solar photovoltaic (PV) market has been expanding exponentially in recent years largely as a result of the reduction in costs for silicon solar cells. The key to advancing solar power capacity to the next level is to increase the efficiency of the solar cells. Some researchers believe that the answer might not be with silicon, which is the most commonly used material today. The problem with silicon is its inefficiency as silicon cells typically only achieve 16-20% efficiency when it comes to converting energy. Multiple other innovations have focused on increasing the efficiency of the solar panels.
As is the case with wind power plants, significant costs can be reduced at solar plants through effective maintenance programs. Automatic data acquisition and monitoring technologies prove especially valuable by allowing the plants to be monitored remotely. This is a key consideration since most PV plants are in remote areas. Some industry experts believe that maintenance technologies are the key to the future of profitable, reliable solar power.
Download The Future of Renewable Energy Relies on Innovations Focused on Increasing Output and Decreasing Costs White Paper to discover the various emerging technologies and processes that have been positioned to help renewable power plants increase their output and decrease costs.
Article contributed by Parker Energy Team
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