A Simple Chart Displaying the Advent of an Energy Revolution
The world we live in is constantly advancing itself with new technologies and in order to sustain its growth, it needs a constant supply of energy. Unfortunately, the methods and the sources we currently use to produce energy are out-dated. Drastic climate changes and continuously depleting fossil fuels is challenging us to look for alternative energy resources.
Renewable energy is such an alternative form of energy. It includes solar energy, wind energy, Hydropower, Tidal energy, geothermal energy etc. The inexhaustible nature is the major advantage of renewables over the conventional energy sources. Renewable energy produces little or no carbon emission and therefore helps us in combating the climate change. The use of fossil fuels releases harmful gases like carbon dioxide, carbon monoxide which gets trapped in the earth’s atmosphere and cause a greenhouse effect.
As we are becoming aware of the drawbacks of using fossil fuels, a number of people are trying to switch to a renewable source of energy. The major roadblock in adapting renewable energy was its cost of production. But a new report suggests that the cost required to produce power from renewables has decreased considerably.
Advent of Energy Revolution –
A report from “Lazard” shows that the cost of producing solar energy is continuously decreasing; it costs around $50 to produce one mega-watt hour of solar power.
On the other hand, coal costs around $102 to produce one mega-watt of energy.
This report is a sign that the world may soon witness an energy revolution.
This report from Lazard highlights the fact that the cost of producing energy from various renewable resources is gradually reducing. Especially, the utility-scale solar plants – plants that transfer electricity into grids have witnessed an extraordinary price drop of 86% since 2009.
The Chart below depicts the significant change in costs over a period of time –
Lazard’s analysis is a measurement based on levelized cost of energy analysis. ‘Levelized’ means including the cost of building the plant, maintaining the plant and fueling the plant for its expected lifetime.
The cost of producing solar energy has decreased considerably which is the main advantage for solar energy companies and we must be ready to face the dramatic changes occurring due to these price drops. This shift can make us adapt renewable sources more smoothly.
Switching to renewable source of energy is the only way to curb the on-going climate change and put an end to our dependency on fossil fuels. But the transformation is only viable if the renewable source of energy possesses the efficiency and cost-friendliness of the of the current conventional energy sources.
According to the report of the United Nations Environment programme the growth of renewable source of energy has been apparent in last few decades.
In 2017, renewable energy like solar energy, wind energy, hydropower supplied 12% of the world’s energy demands. Although 12% may not seem enough, but it is a major achievement for the renewable sector.
Even though solar energy is getting cheaper, Lazard points out that the cost does not take account of external expenses like transmission and storage of power, which is a major hurdle in solar energy adoption. It won’t be a full-throttle revolution until both production and storage of solar energy cost less.
Barriers to renewable technologies –
- Costs – The most widely publicized and criticized aspect of renewable energy is the cost of installation and maintenance. Even though it promises a better ROI and clean fuel, due to its initial high investments, many developing countries resist adopting the renewable alternative.
- Siting – Installation of Renewable sources like wind, hydro and solar energy requires large section of land. Doing so requires negotiations, contracts, permissions etc. This may hamper the overall cost of the projects.
- Transmission – With building infrastructure for generating electricity, renewables also need a different mode of transmission since the existing designs were made to transfer fossil fuels and other conventional energy sources.
- Market Entry – Since the renewable sector needs huge initial investments, start-ups cannot prove their mark in this industry. And they definitely cannot compete with the existing wealthier industries.
- Reliability factors – The opponents of renewable energy always doubts the reliability of solar and wind power. Even though solar and wind power is a much reliable source for clean energy, many investors fail to see the big picture. This results in low capital investments which hinders the growth of commercially available renewable energy.
Even though the renewables have some drawbacks, many people are moving towards this clean form of energy. The decrease in the cost of production will boost the efforts of producing renewable energy at large scale. Revolutionary changes can only happen if we succeed in designing effective storage systems. The storage problem makes it difficult for the developing nations to adopt this technology. Until and unless we develop an effective storage system, these nations are more likely to use the combination of renewable and traditional energy sources.