Within 25 years, humanity will experience the greatest transformation of its energy paradigm since the introduction of fossil fuels. Instead of relying on the finite ancient remains of living things, renewable sources of power from the earth and sun will take us into the next era.
Bloomberg’s New Energy Finance research unit recently published a report on the cost of electricity worldwide, and it shows that clean, renewable energy is becoming mainstream.
“The Bloomberg report says that the average cost of electricity generated by wind farms (on land, not offshore) throughout the world dropped to $83 per megawatt hour in the second half of this year. At the same time, electricity generated by solar panel farms fell to $122 per megawatt hour.
In comparison, the cost of electricity from coal and natural gas actually rose in the second half of this year. Coal-based electricity cost $75 per megawatt hour (up from $66 per megawatt hour) in North and South America, while natural gas-based electricity cost $82 in North and South America (up from $76 per megawatt hour).”
What this means is that wind energy is now economically competitive with fossil fuel energy, and solar is soon to follow. As clean energy technology and financing costs continue to drop, coal, oil and natural gas will become increasingly marginalized.
A breakthrough technology has just been discovered that turns solar energy into hydrogen fuel. This has the ability to supplant gasoline for transportation.
Adding to the monetary cost of fossil fuels are hidden costs in the form of damage to environmental and human health. The National Academy of Sciences reported that fossil fuel combustion causes 20,000 premature deaths in the U.S. every year, and $120 billion a year in health costs.
Pollution from extraction and refining operations dumps toxic materials into the atmosphere and aquatic habitats. Coal extraction now relies heavily on a method known as mountaintop removal, which destroys vast swaths of forested and aquatic habitat. Not to mention accidents such as BP’s Deepwater Horizon disaster and Duke Energy’s Dan River coal ash spill.
The Solar Revolution
Bloomberg explains how market forces and efficiency improvements will make solar energy outcompete coal and natural gas to become the primary source within 25 years.
Solar prices will keep crashing, solar investments will rise to the trillions and global electricity demand will slow, actually declining in some countries. Just as important is the fact that power generation will become decentralized as rooftop solar and regional utility-scale solar systems expand rapidly.
“The biggest solar revolution will take place on rooftops. High electricity prices and cheap residential battery storage will make small-scale rooftop solar ever more attractive, driving a 17-fold increase in installations. By 2040, rooftop solar will be cheaper than electricity from the grid in every major economy, and almost 13 percent of electricity worldwide will be generated from small-scale solar systems.”
Bloomberg notes that fossil fuels will “retain a 44 percent share of total electricity generation in 2040 (down from two-thirds today),” due to legacy plants continuing to operate, and developing countries adding coal and gas-fired plants for quick capacity increases.
However, that will be the last gasp of the fossil fuel-based industrial age. The surge of renewable energy creates its own momentum, according to Seb Henbest, Bloomberg’s head of Europe, Middle East, and Africa analysis.
“Nonetheless, the pattern is changing, and as Henbest explains, once there are more renewables online, there can actually be a process in which their utilization undermines fossil fuels. That’s because renewable installations don’t require any fuel to operate, and thus don’t have that recurring cost that fossil fuel-fired generation has.
So as renewables bid in low to supply power to the grid, they come to supply more of it — meaning that fossil fuel plants operate less.
“You start to go from a world where renewables are expensive, to a world where renewables are actually cheap. And that’s very meaningful,” Henbest says.
The simple reality is that renewable energy will soon make more economic sense. It will also allow people to harness energy from their own localized regions, instead of relying on importation from volatile areas. The oil-rich Middle East may see an end to the decades of western meddling that has kept the region in upheaval.
The transition to renewable energies through market forces will be one of the greatest achievements of mankind. No longer will we have to level mountains, create massive piles of ash, build pipelines through sensitive habitats, and spew pollution into the air and water in order to satisfy our thirst for energy.