According to the U.S. Department of Energy, wind power is projected to become the largest source of renewable energy in 2018. However, the International Energy Agency identifies solar power as the fastest-growing global source of new energy, with China as its champion (since half of the world’s solar panels have been installed in that country). Currently, the U.S. is the second fastest-growing solar market.
So, what is the future of renewables? Is it wind or solar? Or both, or neither?
“Every energy company today, whether predominantly solar, wind, or big oil, will eventually become a renewable energy company,” affirms Tim Nixon, director for Sustainability at Thomson Reuters. He says it’s not a matter of if, but when. “This is because costs for energy sources that are carbon-based will steadily increase, as regulation and environmental damage is fully priced in.”
Meanwhile, the exact opposite is occurring for renewables. “At the same time, costs for energy sources which are renewable will steadily decrease, until the business case is overwhelmingly clear.”
Nixon believes that the future of renewables is wind, solar, new nuclear and probably geothermal energy, as well as other green sources that have yet to be developed. “The question is around timing, which will be predominantly driven by a cost/benefit analysis incorporating policy, investor and reputational considerations.”
One person who thinks the future of renewable energy has already arrived is Kevin Steinberger, a Climate and Clean Energy Program policy analyst at the Natural Resources Defense Council. “Wind and solar have become the cheapest sources of new power in many markets across the country,” Steinberger says. “We need to double down on our investments in wind and solar and accelerate growth in both technologies to achieve our long-term climate goals.”
Steinberger also believes it’s important to support the emerging offshore wind industry. “We need to take advantage of the significant untapped potential just off our coasts.”
Several factors could change the trajectory of renewables
According to the U.S. Energy Information Administration, coal’s share of electricity generation dropped from 48% in 2008 to 30.4% in 2016, but is projected to rise slightly to 31.6% in 2018. Even considering President Trump’s promise to revive the coal industry, there is doubtfully anything that could put the brakes on a renewables-based future.
“The most important factor in terms of the trajectory is the degree to which incorporating renewable energy into a business model can reduce operational costs, attract investment, avoid liability, drive innovation, open up new markets, attract talent and manage reputational risk,” Nixon says. “These factors will all blend differently, but the most important factor at this time is operational cost reduction.”
And, as climate change issues become more severe, he believes reputational risk will also become a more important concern. “This is the actual trajectory we are on, as evidenced by the under-performance of the world vs. the Paris 2 C degree target,” Nixon says. “The calculus must change if we are to stay within the guidelines set by Paris.”
However, he admits that a more forceful level of policy engagement is still needed to meet the target. “Strong climate and clean energy policies, at every level of government, will be essential to keeping us on the right path to rapidly cut our carbon emissions and avoid the worst impacts of climate change,” Steinberger says. “The trajectory of renewables will also be affected by the growth of enabling technologies and infrastructure like storage and transmission, which will be critical components of the low-carbon economy.”
Regardless of whether its wind or solar-powered, renewable energy will always be cleaner than fossil energy, which pollutes the air, water, and soil, negatively impacting health, agriculture and natural resources. And, it’s getting cheaper. These factors make renewable energy vitally important – especially to people who depend on the Earth to make a living. “There are other sources of hope, like a long-shot transformative technical innovation suddenly emerging – but betting on a non-existent technical salvation puts an enormous amount of risk on the least advantaged people of the world who will suffer most if this does not come to fruition”, Nixon says.