If there is any doubt about the momentum renewable energy is on towards it’s inevitability as a major element in the world’s energy markets, a comprehensive annual overview of the state of clean energy by a global policy network should lay any questions to rest.
REN21, or the Renewable Energy Policy Network for the 21st Century, found that 2015 was a record year for renewable energy installations and that “renewables are now firmly established as competitive, mainstream sources of energy in many countries around the world.”
The report, The Renewables 2016 Global Status Report, shows renewable power generating capacity saw its largest increase ever last year, adding an estimated 147 gigawatts (GW). In addition, modern renewable heat capacity also continued to rise, and the use of renewables in the transport sector also expanded.
Ethanol production increased by 4 percent globally, with record production levels in the United States and Brazil. 2015 saw continuing progress in the commercialization and development of advanced biofuels, with expansion in the capacity and production of fuels by both thermal and biological routes.
Meanwhile, the group reports, distributed renewable energy like rooftop solar and small-power wind turbines (a megawatt or less) are rapidly closing the gap between energy-rich nations and those who have insufficient energy to power homes and businesses.
Closer to home, an analysis of March data from DOEs Energy Information Administration (EIA), shows renewable energy is rapidly gaining electricity market share in the U.S, surging ahead of coal-fired power even in some traditionally coal-heavy states. Renewables ‑ hydro, wind, solar, biomass and geothermal – accounted for 19.2 percent of all power generation in the United States during the month, just behind coal’s share of 23.8 percent, described as “an unprecedented low in modern times.” (Non-hydro renewables ‑ mostly wind and solar ‑ exceeded 10 percent of net U.S. generation for the first time on record.)
It should come as no surprise that the unprecedented growth in renewables – as confirmed by the REN21 report – is being driven in large part by the cost competitiveness of renewables when compared to fossil fuels, even when no federal or state government incentives are figured in the calculation. The so-called levelized energy costs (LEC) of coal (9.5-15 cents per kilowatt hour), natural gas (7-14 cents/kWh) and nuclear (9.5 cents/kWh) reflect their current dominance in the energy market. But the production costs of renewables have been dropping steadily as the technologies gain wider implementation, pushing the price down to fossil-fuel and nuclear levels. Wind now stands at an estimated 7-20 cents/kWh, solar at 12.5 cents, solar thermal at 24 cents, geothermal at 5 cents, biomass at 10 cents and hydropower at 8 cents.
REN21 cites additional growth factors, including better access to financing, concerns about energy security and the environment, and the growing demand for modern energy services in developing and emerging economies.
As REN21 points out, a bigger factor behind the growth of renewables is the role of government leadership. As of early 2016, 173 countries had renewable energy targets in place and 146 countries had support policies. They represent the vast majority of countries who committed in Paris last December to efforts to curb climate change, making renewables and energy efficiency key to reducing emissions that scientists say are causing global temperatures to rise. Some have even committed to reforming their subsidies for fossil fuels.
The report underscores the somewhat stunning fact that renewables have undergone this huge growth even as fossil fuel costs have remained extremely low over the past two years.
If for nothing else, policy makers should know that the low-cost electricity generation that is more broadly coming from renewables is crucial to the economy. Investors understand; they put a record breaking $286 billion in renewable energy and fuels in 2015. Renewable energy increases income and employment in all sectors (the REN21 study says 8.1 million people are employed in the renewable energy sector), it raises the purchasing power of the consumer, and it makes U.S. exports more competitive.
Given the widely demonstrated advantages of renewables, policy makers should address the several challenges that remain, the REN21 report states, including policy and political instability, regulatory barriers and fiscal constraints, and achieving effective integration of high shares of renewables into the grid. It’s critical to maintain the momentum renewables are experiencing.
But the global study more importantly underscores the role the United States can play in leading the world to a diversified energy portfolio, reduced emissions and a cleaner environment. U.S. policy makers have a growing responsibility to provide the policies, funding mechanisms and other incentives that can assure this country moves forward to a clean energy economy.