The clean energy revolution has arrived!
Renewable energy, which unlike coal generates little or no air pollution or greenhouse gases, has become increasingly competitive with conventional energy sources. Renewables also offer the opportunity for greater decentralisation, with local set-ups providing reliable, locally-controlled, affordable power, including off-grid solutions. It’s no wonder that communities all over the world hail renewable energy as people power!
Since 2008, the price of solar panels has dropped by 75%. According to Deutsche Bank, 19 regional markets worldwide have now achieved “grid parity,” where solar panels can match or beat local electricity prices without subsidies. This includes Chile, Australia and Germany for residential power and Mexico and China for industrial markets. In Bangladesh, home solar systems are being installed at the rate of 80,000 a month with over 3 million installed to date. Across sub Saharan Africa solar products being sold to communities living beyond the reach of the grid have grown 95% over the past three years. In Kenya, M-Kopa has installed 100,000 home solar systems in its first two years of operation, which are paid through a mobile phone “pay-as-you-go” system, and their goal is to reach one million by 2018. The new Indian Prime Minister, Narendra Modi, has promised to harness solar power to enable every Indian household to power at least one lightbulb by 2019. That would bring 400 million Indians out of the dark.
Wind power is now cheaper than coal in many markets; in the United States its now half the price of existing coal plants. China leads the world in wind power, with 91 gigawatts of installed capacity as at the end of 2013. The United States has the second largest installed capacity of wind in the world, and in many states wind turbines are replacing dirty polluting coal plants. And more conventional renewables such as geothermal and micro hydropower have been cost-competitive for years in many parts of the world.
According to Bloomberg New Energy Finance (BNEF), global installations of renewable energy over the next 15 years will dwarf those of new fossil fuel projects, with solar at the forefront. BNEF projects that around 3,000 gigawatts of new renewable energy capacity will be added by 2030.
While the cost of fossil fuels will continue to rise in a carbon-constrained world, the costs of renewables will continue to decline. A Harvard University study estimated that the external costs of the coal lifecycle in the US are between a third to a half a trillion dollars annually. If the full costs of coal were reflected in coal’s price, it would double or triple the price of electricity from coal, making renewables much cheaper than coal.
With the right package of policy incentives – including strong energy efficiency and demand side management policies, feed-in tariffs, net metering and renewable portfolio standards – governments can leapfrog the age of coal and become clean energy leaders. Innovative financing and policy mechanisms combined with rapid advancements in energy efficiency are already bringing clean, renewable electricity to many people who have been left in the dark for decades due to the failure of coal and other large centralised electricity production systems to deliver affordable energy to remote places. Studies show that off-grid decentralised renewable energy systems can deliver household energy services faster and more cheaply than coal and other centralised generation sources.