There’s good news and sour news on climate change in this hefty new report on renewable energy from the UN and Bloomberg New Energy Finance.
First, the celebratory stuff. Renewable energy — mainly solar and wind, with a tiny bit of geothermal and biomass tossed in — is growing at a record pace. Last year, the world’s nations plunked down $286 billion on renewable energy, twice what they spent on coal and gas. For the first time ever, renewables made up fully half of all new electric capacity installed worldwide, with 118 gigawatts coming online. Next time someone says renewables are a niche market, toss them this PDF.
All in all, renewable energy (excluding large hydropower dams) provided 10.3 percent of the world’s electricity in 2015, up from 9.1 percent the year before:
If you include large hydropower, renewables made up roughly 22 percent of the world’s electricity in 2015. If you add in nuclear, another key carbon-free source, that goes up to around 33 percent. (The catch is that large hydro and nukes aren’t growing as quickly.)
So now comes the sour “yes, but…” This breakneck growth in clean energy isn’t nearly fast enough to drive the sort of sharp CO2 reductions needed to address climate change. Not yet.
For one, the world continues to build lots of carbon-belching coal and gas plants. The fact that wind and solar remain pricey and don’t run 24/7 means there’s still ample demand for fossil-fuel generation. The report estimates that countries added 43 gigawatts worth of coal capacity last year, on net, and 40 gigawatts worth of natural gas capacity. (Countries also added 15 gigawatts of new nuclear, as well as 22 gigawatts worth of large hydropower dams.)
As long as fossil fuel capacity keeps expanding rather than shrinking, it will be tough to push down global CO2 emissions. And this dynamic isn’t set to change anytime soon: the report notes that few forecasters think global power-sector emissions will peak before 2026. (A separate new report from McKinsey & Company, meanwhile, predicts that coal and natural gas will still provide half the world’s electricity in 2040.)
And keep in mind that this report mainly focuses on the electricity sector, which only accounts for 40 percent of energy-related CO2 emissions. If you really want to whip global warming, you’d also need to clean up the transportation sector, too. Plus figure out what to do about cement, steel, and other industries. There are a few encouraging signs along those lines — the report notes that battery prices keep plunging and electric vehicle sales are expanding — but it’s early days yet.
So this chart remains as relevant as ever:
There are some amazing things happening in the renewable energy sector. Boatloads of money are being tossed around. Photovoltaic panels and wind turbines are going up at a frenetic pace. But we’re still very far from solving this pesky climate change problem.
Five other neat charts from the renewables report
The full UN/BNEF report has literally dozens of charts and graphs on renewable trends, but I’ll just pull out five that grabbed me.
1) Forget Europe. The real renewable action is happening in China.
Note that investment in renewable energy has actually been falling in Europe since 2011. (See here for more on that crash.) But it’s absolutely soaring in China.
2) Despite the oil price crash, electric vehicle sales are rising
Some 462,000 people bought electric vehicles last year — up 60 percent from the previous year — despite the fact that oil prices were plummeting. The US market flatlined, but sales have been picking up in China and parts of Europe. From the report: “Improvements in range, reductions in battery prices, and the availability of tax and other incentives have combined with increasing familiarity to propel sales forward.”
The big question is how far electric vehicles will go. Bloomberg New Energy Finance has predicted that annual electric vehicle sales will rise to 2 million by 2020. Other forecasters have been less bullish. We’ll see. But speaking of which…
3) Lithium-ion batteries keep getting cheaper and cheaper
The only way for electric cars to compete with conventional vehicles on price is for batteries to get much cheaper. So it’s excellent news that lithium-ion battery prices fell 35 percent last year. But some analysts argue they have to keep falling further still — to $150/kwh or lower — for electric cars to take off.
4) Energy storage is booming, especially in the United States
For solar and wind to expand, it’d be great to have large grid-scale storage that can smooth out fluctuations in generation. And there are signs this is happening. Last year, the world installed some 250 megawatts worth of new storage technologies (i.e., excluding pumped hydro and older lead-acid batteries), mainly in North America. Cheaper lithium-ion batteries offer utilities more options here.
5) Fossil fuels are still cheaper than renewables+storage
This chart shows the levelized cost of electricity for various energy technologies across different countries.
As you can see, wind electricity has already become cheaper than coal and gas in many places. And solar photovoltaics have been making stunning gains, with the price dropping by nearly two-thirds since 2009. In China and Germany, solar now beats natural gas.
The catch, though, is that solar and wind have intermittency issues that will ultimately limit their reach. For those sources to truly dominate, they’ll likely need to be paired with low-cost energy storage in the future. But, as the chart shows, wind+storage is still more expensive than fossil fuels everywhere. Solar+storage is even pricier. Getting those storage costs down could prove crucial for renewable energy to become a leading power source.
Article By: Brad Plumer