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Latest statistics predict that renewable energy will be cheaper than that of non-renewables by next year. This change will be sustained, making renewable energy consistently the cheaper option. Over the last few years, prices of all kinds of renewables have fallen rapidly, making the once futurist possibility of powering the world on renewables now a firm reality.
Renewable Energy versus Fossil Fuels
The data shows us that since 2010, prices of onshore wind have reduced by roughly 23%, and solar photovoltaic (PV) electricity prices have dropped by 73%. Other renewables have followed this pattern, which is expected to continue. Without doubt, renewable energy is disrupting the entire energy sector, and with the expectation for them to finally be more cost-effective than fossil fuels, the adoption of these energy sources will continue to grow. But why have prices fallen, making them cheaper than traditional non-renewables?
The reason for this tipping of scales is quite simple. Gaining power from fossil fuels is a technology that has been around for a long time. As far as further advances in technology are concerned, the sector is pretty much exhausted. There is little chance of innovations being made to significantly impact the cost of this type of energy production. What we are seeing instead is that as the limited fossil fuel resources become depleted, their costs increase. In addition to this, the cost of running power plants is rising due to the ever-increasing cost of living, coupled with increasing pressure to improve safety and reduce pollution.
Conversely, renewables are still in the youth of their development, with innovations created each year to help drive down the cost of harnessing their energy. As we learn how to efficiently produce, store and distribute this power, we develop methods to do this at the most minimal cost. It’s this multitude of developments which is contributing to the rapidly falling cost of renewables.
Renewable Energy Storage
One of these technological developments is the advancement of renewable energy storage. Once a major concern of renewable energy, experts have now come up with numerous ways to store unused energy so that it can be distributed when power is low, accounting for the intermittent nature of renewable energy sources. Batteries have been devised with the capabilities of storing large amounts of renewable energy. In recent years, the price of the essential components for these batteries, such as lithium, has dropped, allowing savings to be passed onto the consumer. By next year, battery prices are predicted to drop from $5 to $4 per kilowatt.
Another energy storage technology that is catalyzing the price drop of renewable energy is that of hydrogen power. Cheap energy can be provided by obtaining hydrogen by splitting it from water, through using unused renewable energy. This technology has been advanced in recent years, with experts finding that they can use cheaper and more efficient materials to produce hydrogen. Precious metals such as iridium oxide, ruthenium oxide, and platinum were the traditional materials used in electrochemical water splitting, which were costly. But now it’s been discovered that cobalt and nickel oxide, which are in abundance, can be used in place of these expensive materials.
Finally, as use of renewables has developed and up-scaled, the cost of setting up facilities has dropped as more efficient methods and materials are found. With this reduction in overheads, the price of energy reduces.
The reduction in the cost of renewables making them cheaper than fossil fuels is a change that will be sustained into the future. The natural progression of more efficient and cost-efficient technologies has been the main driver in lowering the cost of renewables, whereas fossil fuels are only seeing price increases due to the increasing production costs and scarcity of the resource. This change in price points is set to support renewables’ use on large scale settings across the globe, helping communities meet clean energy goals, creating a sustainable future.
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