For years, the idea of transitioning to a clean energy economy seemed far fetched. In recent years, however, we’ve seen an economic shift that supports the idea that this transition is now well underway. In this article, we’d like to share some promising insights to what’s happening in the emerging clean energy economy.
To start, 2015 saw the negotiation of the Paris Climate Accord, which effectively signalled ‘the end of the fossil fuel era’. The agreement signalled the United States and the world as a whole to reduce its greenhouse gas emissions by 80 percent or more by 2050 in order to significantly reduce the risks posed by unabated climate change.
The Paris Agreement commitments cover emissions from 190 countries, totalling 97 percent of global greenhouse emissions. Some of the strategies outlined for tackling climate change in North America include the need to generate electricity from non-emitting sources, to accelerate efficiency improvements, and to electrify long-lived infrastructure, including in the building and transport sectors.*
While President Trump recently announced that the United States will not be party to the Paris agreement on climate change, growth of the renewable energy industry continues.
The future for mainstream renewable energy was said to happen once the cost of new solar panels would be cheaper than a relative investment in coal, natural gas or other options.
In industry terms, this means the world would need to achieve ‘Grid Parity’ where an alternative energy source can ‘generate power at a levelized cost of electricity (LCOE) that is less than or equal to the price of purchasing power from the electricity grid.’
If you ask the World Economic Forum (WEF), that day has arrived. According to the WEF, solar and wind is now the same price or cheaper than new fossil fuel capacity in more than 30 countries.
Bloomberg recently reported that when inland farms are included, wind power now supplies about a fifth of Texas’s electricity market.
Another promising report, From Risk to Return: Investing in a Clean Energy Economy, finds that achieving the 80 percent emissions reduction is possible with technologies that are already commercial or near-commercially available. This creates major business opportunities for those willing to participate.
People didn’t think about solar energy a decade ago because it was too expensive. With advancements in technology, solar energy is now becoming cheaper day by day, as shown by the 80% cost reduction of solar PV since 2008. Not only that, the efficiency of solar PV cells has also increased.
To continue accelerating the uptake of solar, Tesla recently launched its long awaited affordable solar roof. This solar roof is said to be powerful enough to cater all the energy requirements of an average household.
The Tesla solar roof has been priced competitively so that it is comparable to the cost of a traditional roof, even without the energy savings. The solar roof also aims look better than a traditional roof, overcoming the common complaint that solar PV panels were not aesthetic enough to be considered by many homeowners. Four different variations of the solar roof are expected to be released by Tesla.
At a global level, a record $286 billion was invested in renewable energy in 2015, which was more than double the investment in fossil fuels. Clean energy investment worldwide totalled $53.6 billion worldwide in the first quarter of this year, down 17% from Q1 2016 but only 7% lower than the final quarter of last year, according to the latest authoritative figures from Bloomberg New Energy Finance (BNEF).
The sustainable energy report from Bloomberg New Energy Finance (BNEF), also indicated in 2015, the majority of new power added to the electrical grid came from renewable sources, primarily wind and solar, and that natural gas has nearly overtaken coal as the biggest source of electrical power in the U.S., while wind and solar have increased by 57% above 2008 levels.
The increasing popularity of solar and wind energy has given life to a variety of new job opportunities as well. Reports show that solar energy is now providing twice as many jobs as the coal industry within United States.
With more investments flowing in, the number of jobs generated by renewable technologies will continue to increase. These indicators show that momentum is already building for a rapid shift to renewable energy sources.
While the trends in renewable energy investments are encouraging, renewable energy sources are still a small minority of the world’s total installed power capacity.
While we still have a long way to go, these insights signal that the Paris agreement goals are certainly plausible, it’s the right thing for the planet and the future remains bright for a new energy economy.