“5 megatrends” for a global energy transition

The WWF and German renewable power provider Lichtblick have joined forces to produce an overview of five ways in which the entire world is transitioning to renewables. Craig Morris reviews the five megatrends, which were published only in German.

Renewable megatrends

You’ll never believe number five!


There can be no doubt that renewable energy is entering an era in which growth depends more on market forces and less on policy support. Nonetheless, caution is warranted, lest we make a mountain out of a mole hill. The WWF’s five megatrends are a good place to start. Below is my summary of the trends as published (my comments are further below):

1. The beginning of the end of the fossil era is here.

In 2014, greenhouse gas emissions were stable for the first time in 40 years although the global economy grew. In China, coal consumption dropped. Since 2012, India has abandoned six times more coal plant projects than it has completed. The EU and the US have also closed more coal plants since 2000 than they have opened.

Divestment is also affecting oil. The Rockefeller dynasty is selling its holdings in oil companies. 80 percent of the known fossil reserves need to be left in the ground to prevent the worst consequences of climate change.

2. Renewables are being built faster than coal, gas, and nuclear together.

Wind power has grown from 47 to 370 gigawatts since 2004. Solar has grown from 3.7 to more than 180 gigawatts in the same timeframe. More money is also now spent on building renewables than conventional energy. For instance, 80 percent of power investments in the EU were devoted to green electricity from 2000 to 2013, compared to 19 percent for fossil power plants and only one percent for nuclear.

3. The cost of renewable energy is falling.

The cost of a solar array fell by around 80 percent from 2005 to 2014, and costs will probably be cut in half again by 2025. By midcentury, solar power in the best locations (such as Dubai) may only cost two cents per kilowatt-hour.

Wind power remains even cheaper than solar, making these two sources the least expensive ways of generating low-carbon electricity.

4. The energy future consists of a large number of distributed generators, not a small number of central-station plants.

Germany already has more than 1.4 million solar arrays, and the number in the US has reached 675,000. For developing countries, where 1.5 billion people do not have access to the grid, distributed energy means they will not have to wait until the government decides to build a central-station power plant and expand the grid. The people themselves can start building their own micro-grids, which are increasingly more affordable than grid expansion. In 2014, developing and emerging countries invested 131 billion US dollars, nearly as much as industrialized countries at 139 billion.

5. The energy future is digital.

The merging of IT and energy will enable 100 percent renewable electricity, and we already have all of the technologies we need. French energy giant Engie (formerly GDF Suez) now speaks of the “miniaturization of the energy sector,” explaining that “the new era is distributed, carbon-free, and digital.” Many experts doubt that there is any role to play for conventional energy providers in this future. Critics have held that a breakthrough is needed for power storage, but prices are currently plummeting.

Here are a few of my points in the order presented above:

  • The news that carbon emissions stagnated in 2014 (based on IEA data) may be premature. According to BP data, emissions rose. Still, any curb in emissions would be good news.
  • We should not compare the installed capacity of wind, solar, coal, and nuclear. The capacity factors of these power plants simply differ too much. For instance, in Germany, the capacity factor of solar is around 10 percent, compared to more than 80 percent for nuclear – so you would need 8 GW of PV in Germany to replace 1 GW of nuclear. The figures for GWh (the amount of power generated) is a fairer comparison, which is all the more reason why we should celebrate China producing more electricity from wind turbines than nuclear.
  • The actual cost of renewable electricity will continue to fall, but utilities are increasingly talking about system costs. Proponents of renewables need to be prepared for a different debate.
  • Distributed energy is better than centralized energy in every way. It increases reliability because no single failure is big enough to bring everything down, and it allows smaller firms to get involved.
  • Finally, the digital future sounds enticing, but the details remain to be seen. If everything goes well, we will use excess renewable electricity to generate heat (which is easily stored) and charge electric cars. But mobility will also be multi-modal – people would use their smartphones to find the best way to travel. Fewer of us will own a car, electric or not.

What do you think? Drop us a line in the comments below – we’d love to hear from you!

Craig Morris (@PPchef) is the lead author of German Energy Transition. He directs Petite Planète and writes every workday for Renewables International.

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Craig Morris

Craig Morris (@PPchef) is the lead author of Global Energy Transition. He is co-author of Energy Democracy, the first history of Germany’s Energiewende, and is currently Senior Fellow at the IASS.

7 Comments

  1. Daniel Maris says

    It’s pretty clear to me that storage is the key to the future. The likely winner there looks like chemical batteries.

    Storage cost is obviously the main determinant of progress here, although governments will see the opportunity to create domestic employment and improve their balance of payments, even if some subsidy is required.

  2. Jarmo says

    I think people are ignoring the importance of grids to renewables. If Denmark did not have grids that are connected to the grids in othe Nordic countries and Germany, how could it deal with wind power fluctuations? How can Germany distribute offshore and onshore wind without a grid? Wind power is clearly going the be #1 renewable in Germany.

    Second, electricity is just one part of energy transition. In terms of primary energy, Germany gets almost twice as much of its primary energy from natural gas than renewables. The renewables number includes hydro and biomass, which represent around 40% of the renewable primary energy total.

  3. Daniel Maris says

    Jarmo –

    Surely cost is going to be the determinant here. Wind turbine costs may reduce but not substantially – there’s just too much infrastructure and maintenance required.

    While I agree with you about the current importance of grid connections on a continental scale, if solar plus storage becomes price competitive with all other forms of electricity generation, then it is doubtful that there will be any appetite for building a costly, resource-intensive and visually intrusive grid.

  4. Thomas PELLERIN-CARLIN says

    Nice figures in here, and many thanks for the key point on the capacity factor that is too often forgot.
    However, saying (n°3) that wind & solar are the “the least expensive ways of generating low-carbon electricity” merely forgets hydroelectricity. According to EDF, hydroelectricity production costs can be as low as 1,5 cts per kilowatt-hour https://www.edf.fr/edf/accueil-magazine/10-chiffres-meconnus-sur-l-electricite

    Thomas Pellerin-Carlin
    Research Fellow, European Energy Policy
    Jacques Delors Institute

  5. Jarmo says

    Daniel –
    “if solar plus storage becomes price competitive with all other forms of electricity generation, then it is doubtful that there will be any appetite for building a costly, resource-intensive and visually intrusive grid.”

    Actually, the grid does exist in all industrialized countries.

    There is an additional hurdle. Solar + storage = no grid can only work in areas where there are no great seasonal swings in sunshine. Most of Europe enjoys a relatively dark winter when daylight hours are few.
    In January, German PV generation daily peak is often less than 2 GW. In summer, it is often 20 times greater.

    It is kind of hard to charge the batteries if there isn’t juice to charge them with.

  6. Daniel Maris says

    The 40 times figure is misleading. In London, with the best winter tilt, the difference between winter and summer insolation is only a factor of 3 on average.

    http://www.theecoexperts.co.uk/freebook/appendix-solar-insolation-values-uk

    The point about storage would be that you would provide cover for those low ouput days.

    I wasn’t suggesting we could rush to solar plus storage, but we should see it as the likely end goal.

    We will probably see developments that surprise us along the way. If storage becomes very cheap then we may see huge solar storage tankers plying warmer climes in the summer, loading up say 500,000 tonnes of batteries, and bringing them back to northern countries in the winter to supplement winter solar power.

    I accept of course there are already grids in industrialised countries. I should have perhaps said “building or maintaining”. What I meant was that if we wish to extend wind turbines then we need to extend the grid. Continual expansion of the grid to serve wind energy makes little sense if SPS is cheaper than wind energy. However, I would accept that for the next coupld of decades at least, wind energy will have an expanding role to play.

  7. theophilous says

    I like to speak about effectivity because my proposition points on one that nobody has made for instance large hydropower with only one point of production could be the whole Europe feed i am thinking in the Vizcayan Golf with a offshore platform is possible generate enough output to substitute all Power Houses Europa´s saving Billions of assets and time and lives now how goes it on how works a large hydropower plant at sea this is possible to understand when the patentations description is read would you like this kind of energy model instead stay in the actually electric standard if you think my idea is a good one send me regards

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