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.
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!