Some say that renewables are not an existential threat and believe that they might take only a small piece of the pie by 2040, due to high costs and vital government subsidies. On the other hand, others believe that costs are declining fast, and it may take a significant share in power generation, knocking not just coal, but also natural gas off the throne.
The fact remains that things are changing quite fast due to technological advancements. The breakeven cost of various renewable energy sources has come down significantly, and wind and solar energy are leading the charge. Total global cumulative wind power capacity reached 540 gigawatt (GW) at the end of 2017, up from 93 GW in 2007. Meanwhile, solar went up from 100 GW in 2012 to close to 405 GW in 2017, a four-fold increase. Photovoltaic(PV)solar even surpassed nuclear generation capacity (403 GW in 2017).
The role of renewables is only marginal in the total energy mix, but growing fast, and in the next few decades, it is likely to become a tough competitor for oil and gas. Surely, sources that are economically viable, easily accessible and environmentally friendly will sneak their way to the top of podium by 2040.
Renewable Capacity Outperformed
In the past, the high cost of renewable energy generation constrained investments in the sector. However, due to technological advancements, the levelized cost of electricity (LCOE) reduction for PV solar and wind energy have boosted the competitiveness of these sources against well-established power generation technologies, such as coal and natural gas. In 2017, the US average LCOE without subsidy for PV without tracking was $54/MWh, with onshore wind at $51/MWh, versus gas-fired generation at $49, coal $66 and nuclear at $174/MWh. The continuous declining trend in costs of renewable energy led to an upsurge in capacity and investments.
In 2017, 260 GW of net power generating capacity was added. The renewable industry invested $280 billion in 2017, adding 150 GW of solar (98 GW) and wind (52 GW); both added 58 percent as compared to 28 percent of gas (38 GW) and coal (35 GW). Large hydro and nuclear respectively added 19 and 11 GW.