Very big price declines in renewables

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New DOE report details latest advances in solar, wind, LED lights, batteries, and electric cars


CREDIT: Department of Energy

The U.S. Department of Energy (DOE) has released the 2016 update of its report, Revolution…Now: The Future Arrives for Five Clean Energy Technologies.
The must-read report reveals the game-changing progress core clean energy technologies have made over the last several years — specifically, solar, wind, LED lights, batteries, and electric cars. Accelerated deployment driven by smart government policies, both domestically and around the world, have created economies of scale and brought technologies down the learning curve faster than almost anyone expected.

Chart of the year: ‘Incredible’ price drops jumpstart clean energy revolution

Yes, smart government policies. Without a myriad of subsidies for R&D and use, would there have been a clean energy revolution? Could companies have reaped the large economies of scale and learning if adoption of alternative energy would have had to rely on the market without any help, and without facing a level playing field as competing against fossil fuel that is heavily subsidized and can externalize part of its cost to society as a whole?

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Renewable power is taking off around the world and fast approaching a tipping point in its development. Consider these recent developments: 

• Recent solar-power capacity auctions have come in at record low levels, underscoring how quickly the costs of renewable energy are falling: $0.053/kwh in India, $0.035/kwh in Mexico, $0.024/kwh in Abu Dhabi, $0.029/kwh in Chile, and $0.039/kwh in the United States. 
  
• The fastest-growing job category in the U.S. these days is that of wind-turbine service engineer with median pay around $51,050 a year.
  
• And in January, China said it would shut 85 coal plants and instead invest $350 billion in renewable sources of energy.
  

A report from the McKinsey Global Institute published this week, “Beyond the supercycle: How technology is reshaping resources,” estimates that renewables, primarily solar and wind, could jump from 4% of global power generation today to as much as 36% by 2035, reshaping global electricity markets in the process.

The tipping point for renewable energy is nearly here - MarketWatch

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Terrific article full of graphs showing the alternative energy revolution has become unstoppable:

Wind and solar are about to become unstoppable, natural gas and oil production are approaching their peak, and electric cars and batteries for the grid are waiting to take over. This is the world Donald Trump inherited as U.S. president. And yet his energy plan is to cut regulations to resuscitate the one sector that’s never coming back: coal. 

Clean energy installations broke new records worldwide in 2016, and wind and solar are seeing twice as much funding as fossil fuels, according to new data released Tuesday by Bloomberg New Energy Finance (BNEF). That’s largely because prices continue to fall. Solar power, for the first time, is becoming the cheapest form of new electricity in the world.

The Cheap Energy Revolution Is Here, and Coal Won’t Cut It - Bloomberg

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The Cheap Energy Revolution Is Here, and Coal Won’t Cut It
Fifteen charts about how Trump is building a dangerous “age of plenty on steroids.”
by 
Tom Randall
April 26, 2017, 3:00 AM GMT-3
From QuickTake: Trump Pushes Coal Reviv
QuickTake: Trump Pushes Coal Revival

Wind and solar are about to become unstoppable, natural gas and oil production are approaching their peak, and electric cars and batteries for the grid are waiting to take over. This is the world Donald Trump inherited as U.S. president. And yet his energy plan is to cut regulations to resuscitate the one sector that’s never coming back: coal. 

Clean energy installations broke new records worldwide in 2016, and wind and solar are seeing twice as much funding as fossil fuels, according to new data released Tuesday by Bloomberg New Energy Finance (BNEF). That’s largely because prices continue to fall. Solar power, for the first time, is becoming the cheapest form of new electricity in the world.
But with Trump’s deregulations plans, what “we're going to see is the age of plenty—on steroids,” BNEF founder Michael Liebreich said during a presentation in New York. “That’s good news economically, except there’s one fly in the ointment, and that’s climate.”
Here’s what’s shaping the future of power markets, in 15 charts from BNEF:




Source: Bloomberg New Energy Finance, UNEP

Government subsidies have helped wind and solar get a foothold in global power markets, but economies of scale are the true driver of falling prices. Unsubsidized wind and solar are beginning to outcompete coal and natural gas in an ever-widening circle of countries.




Source: Bloomberg New Energy Finance

The U.S. may not be leading the world in renewables as a percentage of grid output, but a number of states are exceeding expectations. 




Source: Bloomberg New Energy Finance, EIA

Wind and solar have taken off—so much so that grid operators in California are facing some of the same challenges of regulating the peaks and valleys of high-density renewables that have plagued Germany’s energy revolution. The U.S. boom, while not the first, has been remarkable. 




Source: Bloomberg New Energy Finance

Electricity demand in the U.S. has been declining, largely due to increased energy efficiency in everything from light bulbs and TVs to heavy manufacturing. In such an environment, the most expensive fuel loses, and increasingly that’s coal. 




Source: EIA, Bloomberg New Energy Finance

With renewables entering the mix, even the fossil-fuel plants still in operation are being used less often. When the wind is blowing and the sun is shining, the marginal cost of that electricity is essentially free, and free energy wins every time. That also means declining profits for fuel-burning power plants.  




Source: Bloomberg New Energy Finance, EIA

The bad news for coal miners gets even worse. U.S. mining equipment has gotten bigger, badder, and way more efficient. Perhaps the biggest killer of coal jobs is improved mining equipment. The state of California now employs more people in the solar industry than the entire country employs for coal. 




Source: Bloomberg New Energy Finance, U.S. Department of Labor

Historically, economic growth has gone hand-in-hand with increased energy consumption. Advances in efficiency are changing that, too. Call it the Great Decoupling. 




Source: EIA, Bureau of Economic Analysis, Bloomberg New Energy Finance

The sharpest change in U.S. energy has been driven by advances in oil and gas drilling through shale rock. This type of horizontal drilling has also seen enormous improvements in efficiency, deploying fewer workers, fewer rigs, and drilling fewer wells to produce ever-more fossil fuels. The natural gas that comes out of these wells is practically free. 




Source: EIA, Bloomberg New Energy Finance

But demand for that oil and gas may not be long for this world. The world’s cars are getting wildly more efficient. 




Source: EPA, NHTSA, EU, ICCT, Bloomberg New Energy Finance

And the biggest threat to oil markets—electric cars—is just getting started. Joel Couse, the chief economist for Total SA, told the BNEF conference that EVs will make up 15 percent to 30 percent of new vehicles by 2030, after which fuel “demand will flatten out,” Couse said. “Maybe even decline.” 
Couse’s projection for electric cars is the highest yet by a major oil company and exceeds BNEF’s own forecast.




Source: Bloomberg New Energy Finance

The outlook for electric cars—and for battery-backed wind and solar—is improving because the price of lithium-ion packs continues to tumble.  




Source: Bloomberg New Energy Finance

The shift to cleaner energy is ridding the air of local pollutants that cause heart disease, asthma, and cancer, as well as the greenhouse gas emissions responsible for climate change. Trump’s Energy Secretary, Rick Perry, told the BNEF Summit that the U.S. should remain in the Paris climate accord, but should renegotiate it to draw out stronger pledges from European countries. 
Meeting U.S. commitments made under President Barack Obama shouldn’t be too difficult. America is already half way to meeting its 2025 goal. 




Source: Bloomberg New Energy Finance, EIA, EPA

And cleaning up emissions hasn’t exactly burdened consumers. Personal expenditures on electricity and fuels is down significantly. 




Source: U.S. Bureau of Economic Analysis, Bloomberg New Energy Finance

Just meeting the Paris goals for emissions reductions doesn’t go far enough to fend off the catastrophe scientists anticipate from climate change. Eventually the economy will need to decarbonize completely—in energy, agriculture, construction, manufacturing, and land use. And solutions for some of the trickiest and most expensive parts of that equation are still decades away. 
Fortunately, global energy markets at least seem headed in a cleaner direction. 




Source: Bloomberg New Energy Finance

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Renewable energy cost declines continue to outpace what analysts predicted just one year ago.  
That's the upshot from Bloomberg New Energy Finance's latest installment of the annual New Energy Outlookreport, which models the global energy mix out to 2040. The authors predict renewables will capture 72 percent of the $10.2 trillion spent on new generation in the next 23 years, and will produce 51 percent of global power generation in 2040.

That's the global average, which means in certain places, zero-carbon penetration will be even higher, explained lead author Seb Henbest. All renewables will supply more than 80 percent of power in Mexico, Chile, Brazil and Italy, for instance. Solar and wind alone will produce more than 50 percent of generation in Australia, Germany, Mexico and the United Kingdom. In just the next five years, large-scale solar will be cheaper than new coal plants in essentially all major economies.

"The cost declines that we are seeing with these technologies are so steep that it becomes a matter of time as to when they start crossing over and becoming competitive in different ways," Henbest said of solar, renewables and lithium-ion batteries. "These things are getting cheaper faster than we thought even a year ago."

Renewables Are Expected to Dominate Global Power Generation by 2040 | Greentech Media

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Wind is even beating natural gas in Texas, let alone coal..

In the cut-throat Texas energy market, the construction of these coastal wind turbines—some 900 in all—has had a profound impact. It’s been terrific for consumers, helping further drive down electricity bills, but horrible for natural gas-fired generators. They had ramped up capacity in recent years anticipating that midday price surge would mostly be theirs, not something to share with renewable energy companies. Without that steady cash influx, the business model doesn’t really work, the profits aren’t there and companies including Calpine Corp., NRG Energy Inc. and Exelon Corp. are now either postponing new gas-fired plants or ditching them all together.

Texas Is Too Windy and Sunny for Old Energy Companies to Make Money - Bloomberg

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But here is the President..

President Trump blasted wind power during a rally in Iowa Wednesday night, despite the state getting nearly a third of its power from the alternative energy source. During his speech in Cedar Rapids Wednesday night, Trump said he was bringing back coal, highlighting a coal mine that opened in Pennsylvania last month. “I don’t want to just hope the wind blows to light up your homes,” he said. Iowa gets almost a third of its energy from wind, the highest percentage of any state.

Trump attacks wind power in state that gets nearly third of energy from wind | TheHill

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The cost of owning an electric car will fall to the same level as petrol-powered vehicles next year, according to bold new analysis from UBS which will send shockwaves through the automobile industry. Experts from the investment bank’s “evidence lab” made the prediction after tearing apart one of the current generation of electric cars to examine the economics of electric vehicles (EVs). They found that costs of producing EVs were far lower than previously thought but there is still great potential to make further savings, driving down the price of electric cars.

Electric vehicles to cost the same as conventional cars by 2018

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Several of the big trends in clean electricity depend, in one way or another, on batteries. How fast batteries get better and cheaper will help determine how fast renewable energy grows, how fast fossil fuel power plants get shut down, and how fast the vehicle fleet electrifies. The consulting firm McKinsey & Company recently released an analysis noting that batteries, like solar panels before them, are getting cheaper much faster than anyone expected — and the consequences for the power sector are going to be immense. Batteries have entered a virtuous, self-reinforcing cycle. This graphic, adapted from a Ramez Naam post, captures it:



As they get cheaper, batteries make sense for more commercial applications. As new markets for storage grow, demand for batteries increases. As demand increases, economies of scale kick in and batteries get cheaper. Rinse, repeat.

Utilities fighting against rooftop solar are only hastening their own doom - Vox

The rest of the article argues, quite convincingly, how utilities are going to lose their rearguard battle to stop solar in its tracks,

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In March I went to see Henrik Poulsen, the boss of Dong Energy, in Copenhagen. Never heard of him or his company? You are not alone, but the chances are he is keeping your lights on. The largely unknown story of his company is worth telling because it is genuinely revolutionary. Dong stands for Danish oil and natural gas. It was, like Shell and BP, involved in fossil fuel exploration and production. But in less than a decade it has become an 85% offshore wind company, and is divesting its coal, oil and gas interests. By 2023, Dong Energy will be very close to zero carbon. That is a pretty staggering transformation in a very short space of time. 

But it doesn’t end there. This isn’t just a hymn to the glory of an oil and gas company, it’s also a paean to the UK’s “greenest government ever”. Thanks to its support, the price of offshore wind energy has dropped by half in less than two years. By the 2020s, it will be as cheap or cheaper than any other form of power generation. It’s just become much cheaper than nuclear, even taking into account the additional costs associated with the wind’s intermittency. And in any case, this is less of an issue at sea where the winds are more constant..

Wind power is now cheaper than nuclear – the energy revolution is happening | John Sauven | Opinion | The Guardian