A couple of decades ago, renewable energy was almost an outlier: the new kid on the block. But now, solar and wind are not just mainstream: in both developed and emerging economies, they are the preferred option when it comes to power generation.
A powerful synergy of enabling factors and demand-side attributes is propelling solar and wind to compete against, and win, in competition with even the most cost-effective and flexible hydrocarbon-fuelled sources of power. Renewable energy is now the preferred choice when it comes to reliable, affordable, and environmentally responsible energy.
A new report on global renewable energy trends from Deloitte Insights charts the astonishingly rapid disruption of traditional energy systems and markets that renewables are causing as the cost of photovoltaic and windfarm power plants continues to fall.
Clearing the way
Longstanding barriers to the greater deployment of renewables have faded thanks to three strong attributes: rapidly approaching grid parity, cost-effective and reliable grid integration, and technological innovation. Solar and wind can now beat conventional sources on price while increasingly matching their performance. Moreover, the integration of renewables is actually solving grid problems rather than exacerbating them. Wind and solar are now competitive across global markets even without subsidies.
Onshore wind has become the world’s lowest-cost energy sources for power generation, with an unsubsidized levelized cost of US$ 30 -60/MWh, which falls below the range of the cheapest fossil fuel , natural gas—which weighs in at around US$ 42 – 78/MWh. Except for combined-cycle gas plants, the levelized costs of all conventional sources and nonintermittent renewables have either remained flat (biomass and coal) or increased (geothermal, hydropower, and nuclear) over the past eight years, while the cost of onshore wind and utility-scale photovoltaic (PV) plants have dropped by 67 and 86 percent respectively as the cost of components has plummeted and efficiency has increased—trends that are expected to continue.
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