- The Energy Mix - https://www.theenergymix.com -

Renewables Set to Outcompete Fossils, But Not Without Challenges

solar panels jobs

The transition to renewables is set to accelerate after the COP 26 climate summit thanks to plummeting renewable prices and soaring fossil fuel prices, experts say. But energy security concerns, supply chain problems, and land use constraints—particularly in the case of solar energy—may be limiting factors.

“Renewables accounted for almost 30% of global electricity output in 2020, according to the International Energy Agency,” and “recent spikes in fossil fuel prices and coal power price reforms will help [further] boost renewable energy’s competitiveness,” reports the South China Morning Post.

Citing a new report by the American NGO Global Energy Monitor, the Morning Post points to concerns that “the planned US$379 billion expansion of gas infrastructure in Asia risks becoming ‘stranded assets’ as the world turns away from fossil fuels.”

Ratcheting up these risks is the plummeting production cost of renewables. A megawatt hour of solar-sourced electricity that cost a global average of US$378 in 2010 dropped to $68 in 2019, making solar cheaper than both nuclear and coal, Statista reports, citing Our World in Data. Uptake of renewables has clearly tracked the drop in cost with renewables accounting for 72% of all new capacity additions worldwide in 2019.

More recently, spot prices for rooftop solar in the Australian state of Victoria came in at 1¢ per megawatt hour over a two-month period.

But the prevailing winds don’t entirely favour renewables yet, writes the Post. The situation in climate-critical China illustrates the obstacles on the path. 

Currently the world’s biggest annual carbon emitter, China depends on fossil fuels for more than half of its power generation. In a framework outlining its path to carbon neutrality by 2060, released last week, China said it would “increase the share of non-fossil fuels in its energy consumption from less than 16% in 2020 to 25% by 2030”—the same year it promises to peak its carbon emissions.

Set out in the country’s climate action plan are a series of ambitious targets, including “more than doubling installed wind and solar capacity to 1,200 gigawatts (GW) from 535 GW in 2020, expanding hydropower to 80 GW, and increasing hydro energy storage capacity to 120 GW by 2030.”

But there are obstacles to these ambitions, some looming on the horizon and others already present.

Creating potential heavy weather for renewables is the way the current energy price crunch is “shifting policy focus to energy security rather than climate policy,” Yan Qin, lead carbon analyst at data provider Refinitiv, told the Post.

Energy security concerns make policy-makers “more aware of the obstacles of a green transition, such as challenges to integrate a high share of renewables before flexible generation and energy storage become widely commercially viable,” he explained.

“Also casting a shadow over the world’s green energy ambitions,” writes the Post, are “rising costs and supply shortages of lithium and rare earths,” materials critical to the carbon-free transition.

In China, the world’s biggest producer of solar panels, the power crisis is generating cost pressures on the supply chain for solar panels as the cost of polysilicon—a critical material in photovoltaic manufacturing—has shot up by more than 300%.

Such prices “could threaten 56% of global PV developments planned for 2022,” adds the Post, citing an analysis by Rystad Energy.

One further challenge to building out a truly global zero-emissions energy system: competition for land use, with solar power systems encroaching. 

PV solar generating capacity “must grow ten-fold by 2040 if we are to meet the dual tasks of alleviating global poverty and constraining warming to well below 2°C,” says a recent article in The Conversation, citing International Energy Agency projections. The article, written by a team of scientists who recently performed the world’s first global inventory of large solar energy generating facilities, warned of “inevitable trade-offs between solar energy and other uses for the same land, including conservation and biodiversity, agriculture and food systems, and community and Indigenous uses.”

After finding that solar power plants “are most often in agricultural areas, followed by grasslands and deserts,” the researchers urged decision-makers to “carefully consider the impact that a ten-fold expansion of solar PV generating capacity will have in the coming decades on food systems, biodiversity, and lands used by vulnerable populations.”