Renewables Update

In 2015, the renewable energy revolution started in Japanese

21 January 2016 Tomas Kåberger, Chair of Executive Board, Japan Renewable Energy Foundation

Renewable energy deployment as well as electricity production set a long series of national and global records in 2015. Global installed wind power passed nuclear capacity and the wind capacity is now well above 400 GW. Wind and solar together increased more than one hundred GW, likely both grew by a bit more than 50 GW.

China is now installing more solar as well as wind power than any other country, about a third of global installations of both, with less than one fifth of the global population. Since several years China has most wind power capacity in the world. After 2015 they are likely to also have more solar power than anyone after passing Germany.

Germany, still, is continuing as a successful pioneer in renewable energy deployment. Compared to 2014 German wind power production increased by 28 TWh, which is the largest increase ever in a year. Total renewable electricity reached one third of the electricity consumption in Germany. At the end of the 1990s renewable energy share was only 5% as Germany lack the hydro power resources Japan and many other countries have.

The start of the renewable energy revolution is not achieved by the deployment itself. What is important is that deployment has resulted in industrial experience that has brought down the costs of renewable energy. Already in 2014, some of the most experienced countries like Denmark and Portugal found that wind power had become the lowest cost source of new electric power.

In large parts of the world solar electricity on roof tops has provided lower cost electricity than buying from the grid. During 2015 solar electricity started out-competing all other sources of electricity. Bloomberg reports that a procurement process in Chile resulted in solar power plants winning with bids below 7 US cent per kWh while the remaining capacity was contracted to wind farms just below 8 cent/kWh. Coal power was offered at above 9 cent/kWh and was not awarded any contracts.

Solar electricity at 7 cent/kWh or lower did not only occur in Chile. Similar results were reported from Dubai, Texas, and India. Only slightly higher costs, around 8 cent/kWh was reached in countries like Germany with less solar resources.

The falling prices have been predicted, and they are predicted to continue. The revolution is no longer dependent on subsidies: Where electricity markets are open to all, and spot markets exists that give the lowest cost generator the opportunity to sell electricity to consumers, renewables will out compete thermal power.

This development may be delayed in countries where power companies still control the electricity grid and may hinder competing new technologies. But the development cannot be stopped. Countries adopting the renewable opportunities will enjoy less air pollution, lower costs and, shortly, independence from imported energy.