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Times They Are a-Changin’: The Renewable Energy Transition Is Happening, But Major Challenges Are Slowing It Down

Countries, provinces, cities and companies are increasing their renewable energy production targets at a rate that makes clear the transition away from fossil fuels is happening and unstoppable. But they must overcome major structural, political and perception hurdles if they hope to attain a future powered only by renewable sources.

 

I’ve been working in the renewable sector for more than 20 years. If someone told me back in the ’90s that the world would invest nearly $286 billion in renewables and employ more than 8 million people in 2015 alone, I would have fallen off my chair. Not to mention that the bulk of this investment – 55 percent of the total – would come from emerging and developing countries, with China in the lead.

But that’s exactly what REN21’s Renewables 2016 Global Status Report, published on June 1, shows.

Solar and wind are increasingly the investments of choice when it comes to new power installations. In many countries, they are cost competitive with fossil fuels and have none of the disastrous side effects. The times are even changing in the UK, the cradle of the coal-powered industrial revolution. On several occasions in mid-May, for the first time in more than 100 years, no coal was used to generate electricity.

Given that renewables are outpacing fossil fuels in key markets despite the latter’s historically low prices and massive structural and fiscal advantages (fossil fuels get nearly four times more subsidies than renewables), it’s clear that this momentum is unstoppable. And that’s even before taking account of plans to accelerate the renewables transition that resulted from December’s climate agreement in Paris.

That last point is key. In anticipation of the Paris negotiations, countries adopted new laws, targets and plans, while cities, states and provinces launched a range of ambitious renewable initiatives. One of the most important findings of the Global Status Report is that the number of countries with new or strengthened renewable energy targets – and policies to implement them – rose again in 2015 to 173 from 45 back in 2005.

It has also become clear that renewable energy deployment increasingly makes good business sense. By the end of last year, more than 50 of the world’s largest companies had pledged to generate 100 percent of their electricity from renewable sources as part of the RE100 global initiative. As of December, 2,025 companies had independently and publicly pledged to reduce their carbon emissions, many through the use of renewable energy and energy efficiency improvements. This group includes 154 U.S. companies, with nearly 11 million employees, that have committed to purchasing 100 percent renewable energy.

While the trends are undeniably positive, a number of challenges will need to be overcome if we ever hope to see a 100 percent renewable energy future.

In 2015, solar and wind were the primary drivers for record renewables investment. Investments in all other renewable power technologies, including biofuels, fell compared to 2014. This is because emerging technologies can’t yet compete with conventional fossil-fuel and nuclear sources in a market that remains distorted by lopsided subsidies, and where energy prices do not fully reflect their costs to society. This creates an unlevel playing field and disadvantages environmentally sound renewable energy technologies. Governments have acknowledged this problem for years but have not taken decisive steps to fix it.

Although more countries have policy targets in place, most are focused on the power sector. Considering that the heating and transport sectors together account for around two-thirds of energy consumption and more than half of global greenhouse-gas emissions, ambitious policies covering these sectors (along with cooling) are sorely needed.

Integrating renewables into systems designed to carry “baseloads” of fossil and nuclear fuels can be like trying to fit a square peg into a round hole. The state of South Australia, which recently closed its last coal-fired power generator, shows how the prevailing system can be turned on its head. Abundant, variable sources of power such as wind and solar form the baseload, with other flexible sources (including battery-stored reserves) making up the rest. This needs to become the rule rather than the exception.

Renewable energy projects require significant upfront investments, though running costs are relatively low after construction given no fuel costs. It takes time to recoup costs, and an investor needs to be confident that the ground rules won’t change in the meantime. Unfortunately, all too often policies change with each election as a result of ideological differences between governing political parties. Political instability and corrupt institutions or officials, particularly in developing countries, can also be a significant barrier to investment.

Finally, and perhaps most significantly, there is an issue of negative public perception. Despite abundant evidence to the contrary, many people continue to believe that renewables are expensive, unreliable or bad for the environment. The fact is that countries weaning themselves off fossil fuels are reaping significant benefits. Unreliable? Hardly. Portugal recently ran on 100 percent renewable power for four days straight, and Denmark does so regularly. It’s time for perception to catch up with reality.

I’m firmly convinced that these challenges can and will be overcome. None of them are technical in nature; it ultimately boils down to political will. I imagine that in 20 years’ time, we will all be shaking our heads in disbelief that the world ran on fossil fuels for such a long time.

(Top image: A technician performs maintenance on a GE wind turbine at a windfarm outside Galati, Romania.)

Christine-Lins_portrait-e1433420024378-500x390Christine Lins is the Executive Secretary of REN21, a global renewable energy policy network.

 

 

 

All views expressed are those of the author.

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