Renewable energy costs have been falling through the floor — they have fallen so fast that even cleantech enthusiasts have been shocked several times in the past year by increasingly low prices. We’ve been shocked dozens of times in the past 5 years.
I would bet that even most members of the International Renewable Energy Agency (IRENA) didn’t expect solar and wind costs to drop so much over the past 5 years.
I’m sitting in IRENA’s annual General Assembly right now, and the leaders of small island developing nations are talking about their plans to reach 60–100% renewable energy. Of course they are — fossil fuels are expensive everywhere, but especially so on islands. Renewables save money at the cash register, and then also save money spent on health crises and health care.
However, it’s no longer just islands where solar energy and wind energy can save cash — increasingly, if you drop your finger on a globe, renewable energy is the cheapest option for new electricity there.
As I highlighted on Christmas, wind power and solar power are typically now cheaper in the United States than fossil fuels and nuclear, which explains why they are also now accounting for the majority of new power generation capacity.
Another section of the world where renewables are apparently ready to rise (while polluting power plants close) is South East Europe. IRENA’s latest report — Cost-Competitive Renewable Power Generation: Potential across South East Europe — was released just yesterday. Unsurprisingly, low-cost wind and low-cost solar are now able to beat dirty energy on cost alone in South East Europe as well — just as they can on islands, across the United States, in the Middle East, across Asia, across South America, and elsewhere.
Specifically, IRENA writes: “The report underscores that SEE possesses vast technical renewable energy potential – equal to some 740 GW.” This renewable energy potential is dominated by wind and solar. “The region’s wind energy (532 GW) and solar PV (120 GW) potential is largely untapped, and 127 GW of this overall renewable energy potential could be implemented in a cost-competitive way today.”
127 GW is, very generally, akin to 100 conventional power plants. However, with a more attractive cost of capital, that 127 GW figure could even rise to 290 GW or more.
But even IRENA is being too generous to pollution plants. The pollution coming out of coal and natural gas power plants costs us a great deal. The health costs of burning ancient fossils are real, very real. Then there are also the climate costs, which could essentially be quantified as infinity if we lead ourselves to societal collapse by not switching to renewables, electric cars, and a cleaner diet more quickly.
Nonetheless, there’s a reason IRENA is conservative in its approach to these reports and announcements. There are people — especially policymakers — who would rather not count the cost of pollution when discussing energy costs and making policy. Beating fossil fuels (and extremely expensive nuclear, of course) “at the register” is important to make the point that renewables are cheaper even separate from cutting health and climate costs.
Renewable Energy Potential in South East Europe
Renewable Energy Potential in South East Europe Relative to Cost of Capital
It’s not actually surprising news at all that renewables are cost-competitive in South East Europe, and that they have massive potential (740 gigawatts worth) in that region. Unfortunately, yes, this would be surprising news to most of the population, including many or most policymakers. I would bet money that the majority of people in Europe (and the US) think polluting power plants are cheaper than renewables — that renewables are a green luxury.
This myth needs to be walked to the grave.
That’s why we need reports like IRENA’s, and why it’s important for those of you reading this to share with your colleagues. No, most of your family and friends probably won’t read or even open the article, and certainly not the report! However, headlines have an effect — a stronger effect than they really deserve, but that’s the world we live in today. One headline in someone’s news feed can help them to move beyond the 1950s and understand that renewables are cost-competitive, are cheaper, are growing, and should dominate. 10 such headlines should seal the deal — your colleagues can be transformed, their outdated misperceptions dissolved.
This kind of grassroots sharing and passive discovery have an important role to play. The chain of information is built from one person to another, perhaps seeding an entrepreneurial idea, perhaps informing a future policymaker, perhaps landing in the inbox of a powerful politician in South East Europe.
If renewables are cheaper, it may seem obvious that the world will switch to renewables, but the shift will happen much faster or much slower depending on awareness and policy. There are still trillions of dollars in subsidies for fossil fuels — for polluting power plants. Why?
In the new IRENA report, Director-General Adnan Z. Amin’s intro includes these powerful points: “South East European policy makers need to look more closely at wind and solar photovoltaic power as over 98 GW of wind energy and 5.2 GW of solar PV could be deployed today in a cost-competitive manner. These are viable power supply options that could play an increasingly prominent role in the region’s power systems.”
IRENA didn’t pull these numbers out of a hat, of course. The organization worked with regional experts, used data from the Global Atlas for Renewable Energy, and used project cost data in order to come to these conclusions.
The power sector is not the same as the telephone market, though. Power plants are gigantic, contracts are long term, and regulations must allow renewable energy projects to connect to the grid and sell electricity to the grid. IRENA’s report highlights that governments need to permit cost-competitive — well, cost-saving — renewables to come onto the grid and cut pollution. It highlights several regional barriers for an accelerated uptake of renewables and how to overcome them. Naturally, this region isn’t the only one facing such barriers. Check out the fifth chapter of the report for more details and recommended solutions.