New Energy Going Global
Renewables are primed to enter the global energy race; solar and wind power could soon compete with oil and gas on scale and cost
Sam Arie, August 13, 2018 (Financial Times)
“In 2010, using solar power to boil your kettle would have cost you about £0.03. By 2020, according to estimates by our research team at UBS, the cost will have fallen to half a penny. By 2030, the cost could be so near to zero it will effectively be free…Abundant, cheap, clean power can be put to many uses — not just making tea…[It] is contributing to a wave of corporate action in the energy sector…[About a dozen major European utilities have recently announced] acquisitions, divestments or takeovers that could substantially reshape their business…Until recently, wind and solar in most parts of the world relied on generous subsidies — meaning renewables could only grow at the speed governments were prepared to pay for them. But in the past year large wind and solar projects have appeared that are viable without any subsidy or tax break at all. This means renewables can start to grow as fast as technology development allows, rather than at the pace that the world’s energy ministers decree…
…[Governments have been turning the screw on cost. Where subsidies are available, companies must now bid for them in competitive auctions, and when the subsidies run out the companies may still bid against each other to secure the best sites for projects. This auction model is driving innovation and efficiency at a level nobody expected. In the UK, tendering has cut the cost of offshore wind by more than half in just three years. In Germany it has helped to shrink the premium for renewable energy by roughly half since 2015…[This] is pushing the developers towards a new, global race for scale…[W]ind and solar farms are getting bigger…[and the companies] are getting bigger…[This means] the structure of the industry will need to change…In the future, it may become more similar to the oil and gas industry with a smaller number of larger companies competing for global market share…[Few companies] will have time to relax and put the kettle on.” click here for more
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