As global energy supply is becoming more diverse, entirely new models of power generation are emerging.
Developing renewable energy has become increasingly cheaper and more viable than ever before, which in turn has triggered an ongoing paradigm shift, forcing many stakeholders to re-examine how to approach this new era in global energy generation.
International Renewable Energy Agency’s (IRENA) annual renewables report, reveals that renewable energy now accounts for a third of global power capacity with growth in all regions of the world, albeit at varying speeds.
According to the report, Asia accounted for 61% of new renewable energy installations and grew installed renewables capacity by 11.4%, with growth being fastest in Oceania, which witnessed a 17.7% increase in 2018. Africa’s 8.4% growth put it in third place just behind Asia. In total, nearly two-thirds of all new power generation capacity added in 2018 was from renewables, led by emerging and developing economies.
IRENA’s analysis also contrasted renewables to non-renewable energy,
focusing predominantly on nuclear and fossil fuels. It found that while nonrenewable generation capacity has steadily decreased in Europe, North America and Oceania since 2010, it has increased in Asia and the Middle East over the same period.
“Through its compelling business case, renewable energy has established itself as the technology of choice for new power generation capacity,” said IRENA Director-General Adnan Z. Amin in a press release. “The strong growth in 2018 continues the remarkable trend of the last five years, which reflects an ongoing shift towards renewable power as the driver of global energy transformation. Renewable energy deployment needs to grow even faster, however, to ensure that we can achieve the global climate objectives and Sustainable Development Goals.”
Aside from Iceland, which generates the most clean electricity per capita on earth, with nearly 100% of its energy coming from renewable sources, several other countries have recently joined Iceland in leading the charge towards a cleaner future.
For several years, Costa Rica has been able to run on around 95% renewables for an average of 300 days per year. While there are several factors behind this, such as an abundance of geothermal renewable sources, a small population and a lack of heavy industry, another key reason is that for the first time in history, new renewables projects can be deployed without governmental support.
One of the biggest industry news stories last year covered Hollandse Kust Zuild, an offshore wind farms project, which will be situated 20 km off the coast of The Hague. Hollandse Kust Zuid phases I and II are expected to generate 750MW - enough to supply around 1million households with green energy. It will be the world’s first offshore wind farm to be built entirely without public subsidy.
are now looking to get rid of subsidies for renewable energy projects. Beijing, too, has recently announced that China will give priority to the construction of subsidy-free renewables projects. This comes on the back of the central government’s pledge last year in ensuring that renewables will become grid competitive with traditional energy sources, after a surge in capacity left the finance ministry with a subsidy payment backlog of around USD 17.9bn.
“The cost reductions in renewables have actually been happening since the 1970s, but prices were kept high because of the demand through subsidies, which overwhelmed the supply chain. At the same time investments kept pouring in, and once there was enough of investment, it started to push the prices down very quickly. The cost curve was really quite consistent,” says Mr Michael Liebreich, CEO of Liebreich Associates, through which he provides advisory services and speaks on clean energy and transportation, smart infrastructure, as well as climate finance, technology and sustainable development.
“We’re now living in a world where wind and solar have not only become grid-competitive, but they’ve blasted right through it. Nevertheless, it is imperative to keep in mind that these are variable resources and we need to come up with a completely different way of thinking about how to deliver electricity moving forward,” Mr Liebreich adds.
Prior to renewables, he says, the only consideration for delivering energy was baseload power, which was cheap, and peaking resources such as gas, gasoline and diesel that were considerably more expensive and were reserved for times when the grid was unable to cope with demand. The difference today, is that due to the variable nature of renewables, everyone is trying to get their hands on as much renewable energy as they possibly can, which essentially creates a “surplus budget” to offset peaking resources.
“A lot of commentators seem to find it very difficult to understand that this can be just as resilient, just as cheap, but much cleaner than the alternatives.”
Looking at Southeast Asia, Mr Liebreich sees ample opportunity for growth, but considers the region’s rich renewable energy potential largely untapped. He also envisions a future where energy delivery systems around Mekong and elsewhere will be far more fragmented and intricate than they currently are.
“People who think we’ll just slap a few solar panels on the roofs and call it a day, that’s not how this will work because it would only cover a part of a single household’s energy needs. Instead, we’ll have a fractal design where we’ll take the solar from your roof, but also the wind from the coast nearby and perhaps more solar from a neighboring country.
Seasonality also plays a big role in power generation capacity in both wind and solar, so an additional emphasis needs to be placed on data and mapping of resources.”
There are a fair share of opposers to the development of renewables, with the main criticisms centering mainly around the environmental impact on wildlife due to the large landmass required for the projects, and even the aesthetic impact on the landscape in the case of wind energy and its enormous turbines.
“It’s true that one of the downsides of renewables is that they require a large amount of space to develop. They are not going be as dense as gas, coal or nuclear-fueled power stations, but that’s why floating solar panels in reservoirs and offshore wind are such interesting prospects, especially for many land starved countries like Japan, UK, Singapore or Hong Kong.”
Mr Liebreich also points out that an emerging trend in solar is mounting higher up, which means that the ground beneath it could be used for agriculture, giving it a dual purpose.
“The truth is that developing any type of energy will have an impact, but these are not unsurmountable challenges.
Once you have local consent and buy-in, the good thing about renewables in that they will be consumed locally. It’s not as if there will be a massive wind farm in Thailand and all that power would be shipped to Saudi Arabia.”
He points out that two hundred years ago, we had a very different relationship with energy – everyone knew that you don’t heat the house when it’s not in use, and partial heating for most used rooms was how people survived winters.
“While I’m not advocating going back to that type of stoicism, it’s clear that everybody had a relationship with energy that was very different. We’re now witnessing a very odd period of human history where you flip a switch and you don’t even know where the power station is that is powering the lights. At the same time, renewables with local community ownership models or even switching to LED light bulbs for energy efficiency are forcing people to have a more direct relationship to the homes and take back ownership.”
The Three-Third World, a term presented by Mr Liebreich at an EMEA summit in 2017, that represents an outlook of a world a world where 1/3 of electricity would come from wind and solar, 1/3 of vehicles be electric and the economy would be 1/3 more energy productive by 2040.
“If we manage to achieve that by 2040, I will be happy not happy. I’ll be happy because it certainly outstrips my expectations when I founded New Energy Finance in 2004. The reason I would be not happy is because we have a real climate problem and although a Three-Third World would cap emissions from growing, it’s nowhere enough. We need to go far beyond that, which means we need to do more wind and solar alongside other renewables, nuclear if we can, more electric vehicles and figure out how to decarbonise the rest of the economy – industry, chemicals, aviation, shipping, and heat.
The energy delivery infrastructure needs to be fractal and while grids aren’t going anywhere, we need to manage power consumption on a microgrid level because that will force us grab the clean resources and integrate them, which is good for reducing overall emissions but it’s also very good for resilience, which is something I’m very concerned about because we’re rushing towards integration on transportation, energy, and telecommunications and you can see how a failure in one part of that network might cascade and bring the whole thing down.
I’m really microgrids.” quite bullish on