With global investment and rapid technological advancements, energy prices are steadily decreasing. As a result, more than half of new energy globally comes from renewable sources. In 2015, large enterprises directly contracted for 3.4 gigawatts of clean energy – about 20% of the total renewables market – and utilities and homeowners bought the rest. Moreover, 85% of companies that have purchased clean energy say they plan to buy even more in the next 18 months.
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Wind
Many countries are increasing demand for renewable energy solutions and are making progress toward meeting their energy needs. However, they are testing the limits of renewable energy resources and the economics of these alternatives. For example, wind, solar, and geothermal energy are plentiful in the USA and provide between 10 and 15 percent of the country’s electricity needs. However, these energy sources require extensive materials and are often more expensive than energy-dense sources. To increase demand, governments should consider extending production tax credits and encouraging renewable energy sources to meet global electricity needs on a large scale.
Wind energy is also a cost-effective supplementary energy source that can supplement hydro. The capacity factor of wind turbines is inversely proportional to wind speed, so doubling wind speed yields eight times more energy. However, wind turbines require prevailing winds of at least four meters per second, and anything higher will spill energy. In addition, most turbines are on onshore sites, while offshore sites are more expensive to install.
Solar
Renewables are increasingly replacing conventional power sources, but the question remains: How to create more demand? For starters, renewables are much more cost-effective than their centralized counterparts. For example, utility-scale solar and wind power are considerably cheaper, while distributed resources such as rooftop solar are between four and seven times as expensive. Yet, there is excellent scope for maximizing the benefits of renewable energy solutions by putting a premium on grid flexibility.
To achieve this, government policies and incentives can help. For example, investment tax credits (ITCs) can reduce installation costs and shorten the payback times of clean technologies. As a result, during the past five years, the prices of developing clean energy solutions have dropped by 74% and 55%, respectively. In addition, LED light bulbs have dropped by 94% in less than a decade, and storage technologies are also becoming cheaper. Ultimately, renewable energy solutions can help consumers reduce energy costs and create a more stable world.
Nuclear
Humans have long harnessed the power of nature for transportation, heating, and lighting. Windmills have ground grain for millennia and powered ships, and the sun has provided heat and light to homes and other buildings. But over the past 500 years, we’ve become more dependent on less clean energy sources. And now, we must change that. So here are some ideas to increase the demand for renewable energy solutions.
To reduce the Levelized Cost of energy from renewable sources, governments should focus on reducing costs by building more capacity and increasing scale. This way, renewable energy can compete with conventional sources, such as coal and nuclear. In addition, grid connection complexity and backup capacity should not be a barrier to deploying renewable energy. However, intermittent sources like wind and solar need additional resources for their production and can reduce the profitability of other energy sources.
Natural gas
Natural gas is a versatile fuel with many uses, but its role in energy generation is growing. Today, gas accounts for about a third of the primary energy consumed in the United States. Its many uses include on-site electricity generation, transportation, industrial processes, and process heat. Natural gas also plays an increasing role in power generation, surpassing coal as the number one fuel used in power generation. Currently, natural gas accounts for about one-third of the electricity market in the U.S.
While gas has been pushed as a cleaner and more environmentally friendly option, the fuel’s green credentials have not been the driving force behind its rise. Instead, gas has triumphed in the United States and other countries because of its cost and clean emission profile – two factors that don’t work together but have helped it succeed. As a result, this has been an ex-post rationalization for more gas use.
Electricity generation
A significant factor for the future of renewable energy is the development of transmission systems and social acceptability issues. In 2011, the U.S. generated only 12 percent of its electricity from renewable sources. By comparison, the U.K. and Germany produced over double that amount. A significant problem was harnessing natural energy sources to meet electricity demand. By 2050, both countries could supply 50% of their renewable energy. But, there are many obstacles to overcome.
First, energy storage is an effective solution for utilizing variable renewables. Energy storage will enable the storage of surplus electricity produced during high wind speeds or solar radiation, which can be used later during high electricity demand. Second, building more transmission lines between areas with abundant renewable resources and low-cost regions will mitigate the uncertainty associated with integrating renewables into the grid. Third, building solar plants in deserts will increase flexibility, reduce the cost of electricity, and help mitigate weather-dependent uncertainty.
Carbon capture and storage
Global investments in energy efficiency and renewable energy reached $1.8 trillion in 2018, but carbon capture and storage investments fell sharply. As a result, global climate ambitions remain unmet, and capital flows are out of step with reality. The next step is mobilizing green finance to build clean infrastructure and deploy carbon capture and storage. This article outlines the opportunities and challenges for companies to play a leading role.
While carbon capture and storage benefits are widely accepted, the technology remains in its early stages. In addition, carbon capture and storage require engineering solutions to achieve the desired results. Some solutions include direct air capture and storage (CATS), bioenergy with CCS, and carbon mineralization. These solutions can help reduce global warming-related emissions and mitigate the effects of deforestation and climate change. However, they will require advanced technology to be viable.