Renewables and efficiency have already won the battle for the future of electricity.
At least, that was the message at the Bloomberg New Energy Finance (BNEF) Summit in New York City last week. In his must-see keynote talk, BNEF founder and chair Michael Liebreich explained that if you blinked, you missed the clean energy revolution: “This is a different world from three years ago.”
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At last year’s summit, Leibreich debunked the myth promoted by Bill Gates and others that we needed a clean energy miracle to solve the climate problem, in a keynote titled “In Search of the Miraculous.”
Over the past four decades, for every doubling in scale of the solar industry, the price of solar modules has dropped roughly 26 percent. Thanks to sustained long-term deployment programs, “we’ve seen the costs come down by a factor of 150 since 1975. We’ve seen volume up by [a factor of] 115,000,” Liebreich said.
“How much more miracle-y do you need your miracles to be?” he asked.
This year, Liebreich’s message was that the “miracle” has gone mainstream.
Last April, the cheapest contract for unsubsidized solar was 3.6 cents per kilowatt hour (kWh), Liebreich said. A year later, it has fallen 25 percent to just 2.7 cents/kWh. Last year, unsubsidized offshore wind was going for 5.3 cents/kWh. Now it is 4.9 cents/kWh. For context, the average residential price for electricity in the United States is 12 cents per kilowatt-hour.
“These are the record prices,” Liebreich noted, “but nonetheless, they’ve become the normal prices shortly after.”
Average global prices dropped so sharply in the last year — 17 percent for solar generation, 18 percent for onshore wind, 28 percent for offshore—that even though renewable energy investment was down last year, the total renewable installations were up.
The fact that investment in renewables continues to top that for fossil fuels by two to one led Liebreich to say, “I keep telling people, this is not ‘alternative energy’. This is just mainstream, power-generating technology.”
At the same time, energy efficiency has also exploded, thanks to smarter, state-based utility regulations resulting in massive investment in the cheapest and cleanest source of electricity — using less of it. Improvements in efficiency are a major reason why electricity demand in this country has been flat for nearly a decade, decoupling from economic growth.
The future is now.