Running the Numbers on Renewables
When talking about the renewable revolution, what comes to mind? Wind farms in Germany and solar farms in California? Or is it China’s massive wind fleet and India’s solar target for 100 GW by 2022? Of course, all of these visions reflect today’s renewable landscape in their own way. Together, they help tell the story of renewable energy on a global scale. It’s a story rooted in several decades of development, and one that will dominate the energy landscape for decades to come.
In the 1980s, the United States and a small handful of other countries began small investments into experimental wind and solar projects. By 1990, New Zealand was the only country in the world had more than 5% of its total generation come from wind and solar combined – a total of 6.8% of its generation. But not much happened through the 1990s, and by 2010, New Zealand and Australia had a combined wind and solar capacity of less than 5 GW.
By 2010, nearly all of the renewable investments were coming from OECD countries, and from a generation mix perspective, Europe dominated the landscape. 17% of Spain and Portugal’s generation came from wind and solar alone. Throw hydro into the mix and that takes it to about 35% in Spain and around 45% in Portugal.
However, since 2010, China’s wind and solar generation has grew by a combined 30% annually. In 2015, these two sources generated 4.1% of the country’s electricity (adding hydro to the mix brings the total to 24.7%), and in 2016, China installed more than 30 GW of solar, adding to the existing 43.5 GW. The country’s 2020 solar target of 150-200 GW is looking more achievable every day. Wind generation has grown quickly as well, with an expectation of 16 GW to be added annually over the next five years, moving the base from 122 GW at the beginning of 2015 to 210 GW by 2020.
Virtually non-existent only a few decades ago, renewable energy as a source of electricity generation has grown exponentially across continents. Europe now derives more than 10% of the continent’s electricity from renewable sources, while emerging markets like China’s renewable growth far outpaces an already rapidly expanding economy.
Now, let’s shift to the world’s other major emerging market – India. The current government, led by Prime Minister Narendra Modi, targeted 100 GW of solar generation by 2022. With about 8.5 GW installed as of November 2016, the target for 2022 seems daunting. However, the country’s system of incentives and low soft costs created renewable energy tariffs that are now cheaper than the basic utility price. Over 12 GW of solar projects are in the pipeline for 2017, which would allow the fast-growing nation to surpass that year’s installation target.
So, the next questions is, where will growth be moving forward? In short, everywhere.
Looking forward solar is set to transform grids of the world’s largest developed and emerging economies. Particularly in China and India, ambitious government goals and falling solar costs are expected to translate to unprecedented growth and massive amounts of new renewable capacity.
Not only are government climate commitments facilitating development and market integration, but the raw costs of wind and solar continue to fall. These two resources are price-competitive sources of generation in new markets every month. The price of solar panels as of August 2016 was around $0.45/watt, which is 70% lower than the 2010 price of $1.50/watt. Utility-scale wind turbines are now as low as $1.3/watt. In other words, while altruism may have driven renewable growth so far, economics will push renewables forward for years to come. That means less focus on government commitments, and more focus on cost-competitiveness, with a stronger look at a country’s overall economic outlook.
The post Running the Numbers on Renewables appeared first on Schneider Electric.