Remarkable progress of renewable energy since 2010 has made old energy systems and beliefs about energy technologies obsolete in the last decade. Yet, more dramatic change is to come!
From what can be seen in the autumn of 2019, more than half of the world’s increase electricity generation during this decade will have come from renewable energy, mainly wind, hydro, and solar. In the decade from 2010 to 2020 an increase of more than 3,000 yearly terawatt-hours (TWh) of electricity from renewable energy.1 Strikingly surpassing the International Energy Agency (IEA)’s most optimistic projections published at the end of the last decade. 2
Altogether, RE growth appears to clearly exceed that of fossil fuels despite notable increase in coal in China and India.
Nuclear power may increase by some 100 TWh in 2020 compared to 2010. The only region with significant increase is China. The Fukushima nuclear core melts in Japan in 2011 contributed to the slow development, but more important is the industry’s own multiple failures to deliver cost-competitive and timely projects, and old reactors closing in competitive electricity markets in Europe and the US.
In 2010, new onshore wind and solar PV were more expensive than new fossils and nuclear power. In most markets, they are now the cheapest technologies for new electricity generation. Costs are still coming down as a result of industrial experience and economies of scale. As the global potential is enormous, and costs still falling, the development during the next decade may have even more dramatic consequences for the structure of the global energy industry.
This drama will evolve as new unsubsidized renewable energy projects outcompete existing amortized fossil and nuclear power plants.
Power companies which did not adapt their business strategies to this new paradigm have already been forced to recognize billions of dollars in impairments. In this regard, restructuring of German large utilities RWE and E.ON have been the most spectacular. More is to come.
The latest IEA’s World Energy Outlook 2019, contains a sustainable development path where the share of renewable energy in global total energy demand will reach 21% in 2030, up from only 14% in 2018 (13% in 2010). A question is if the IEA now have learned to describe renewable energy development properly or if it is still underestimating the speed of development.