Renewable energy is now cheaper than natural gas and coal in parts of the United States. The only problem: Cheap renewables may not be enough to stop the world from warming to dangerously high levels.
The dynamic is outlined in a pair of recent reports. The first, by the financial advisory firm Lazard Frères & Co. LLC, finds wind and solar costs have declined by 69 percent and 88 percent, respectively, over the last nine years. In some parts of America, renewables don’t need subsidies to outcompete fossil fuels.
That should be music to the ears of climate hawks.
Yet the International Energy Agency’s (IEA) annual World Energy Outlook outlines the scope of the challenge facing greens. The agency projects global energy demand will rise 25 percent through 2040 if it stays on its current trajectory.
Even more vexing for would-be carbon cutters: The average coal plant in Asia is 11 years old, meaning emissions from the sector will likely be locked in for decades to come, even as older American plants are retiring.
“If we’re trying to avoid the absolute worst and scariest impacts of climate change, we should be transforming the energy system far faster than we are on the economics alone,” said John Larsen, director of power sector and energy systems research at the Rhodium Group.
The IEA’s findings serve as a powerful reminder that the dynamics playing out in America’s power sector are not mirrored everywhere.
In the U.S., coal plant retirements in 2018 are nearing record highs, even as President Trump works to lessen the burden of environmental regulations (Climatewire, March 15).
The Lazard report shows why. The levelized cost of energy—the total cost of building and running a power plant over its lifetime—for an onshore wind farm ranges from $29 per megawatt-hour to $56. Utility-scale solar costs are $36-$44 per MWh. And those numbers continue to decline. Average wind and solar costs fell by 7 and 13 percent from 2017 levels.
Read more at Scientific American