2 P. MIDFORD
This shift toward renewables is in part driven by falling costs. For
example, the unsubsidized levelized cost of utility-scale solar PV projects
fell by 89% from 2009 to 2019, and wind power fell by 70% during the
same period (Lazard 2019, slide 9; Jackson 2018). Already by 2014 total
installed wind-power capacity had surpassed installed nuclear capacity,
with more than 500 GW in wind capacity in 2017 (Wind Power Monthly
2017), and 651 GW by 2019 (GWEC 2020), versus 392 GW for nuclear
power (Power Technology 2018). The cost of related technologies is also
falling dramatically as well. Most notably, the levelized cost of storage
batteries fell by nearly 50% between 2018 and 2020 to USD150/MWh
(Eckhouse 2020). In 2020, despite the pro-coal policies of the Trump
administration, renewable energy is eclipsing coal as source of electricity
in 2020, a development powered by a drop in the USA of more than 40%
since 2010 in the cost of building new wind farms, and a drop in solar
costs of more than 80% (Plumer 2020).
Although renewable energy technology has advanced remarkably in
the past decade and this new technology has rapidly spread, adoption
of renewable energy has varied markedly by country. For example, renewable energy already constitutes a large percentage of electricity generation
in Denmark, yet remains exceptionally modest in South Korea, despite
the latter’s lack of domestic fossil-fuel resources. This book tackles this
puzzle of why the diffusion of essentially the same renewable energy
technology globally is producing very different outcomes across nations.
It does so by focusing on the emerging bottlenecks and opportunities
for the rapid diffusion of renewable energy that have arisen as the technology has developed and become increasingly economically competitive,
despite the recent environment of declining fossil-fuel prices. Specifically,
this book focuses on what can be called the stage-two challenges and
opportunities facing renewables.
Stage one was about commercializing newly developed renewable technologies, especially solar PV and large-scale wind power, driving down
their costs and making them a viable power source. If one policy encapsulates this period, it is the Feed-in-Tariff (FIT), that guaranteed above
market rates for renewable electricity over multiple years, but with the rate
for new installations gradually declining over many years. FIT schemes
and related policies have been very successful in many countries, so much
so that new challenges have emerged to the further diffusion of renewable energy, starting with the ability of grids to absorb all the variable
electricity being produced.
This shift toward renewables is in part driven by falling costs. For
example, the unsubsidized levelized cost of utility-scale solar PV projects
fell by 89% from 2009 to 2019, and wind power fell by 70% during the
same period (Lazard 2019, slide 9; Jackson 2018). Already by 2014 total
installed wind-power capacity had surpassed installed nuclear capacity,
with more than 500 GW in wind capacity in 2017 (Wind Power Monthly
2017), and 651 GW by 2019 (GWEC 2020), versus 392 GW for nuclear
power (Power Technology 2018). The cost of related technologies is also
falling dramatically as well. Most notably, the levelized cost of storage
batteries fell by nearly 50% between 2018 and 2020 to USD150/MWh
(Eckhouse 2020). In 2020, despite the pro-coal policies of the Trump
administration, renewable energy is eclipsing coal as source of electricity
in 2020, a development powered by a drop in the USA of more than 40%
since 2010 in the cost of building new wind farms, and a drop in solar
costs of more than 80% (Plumer 2020).
Although renewable energy technology has advanced remarkably in
the past decade and this new technology has rapidly spread, adoption
of renewable energy has varied markedly by country. For example, renewable energy already constitutes a large percentage of electricity generation
in Denmark, yet remains exceptionally modest in South Korea, despite
the latter’s lack of domestic fossil-fuel resources. This book tackles this
puzzle of why the diffusion of essentially the same renewable energy
technology globally is producing very different outcomes across nations.
It does so by focusing on the emerging bottlenecks and opportunities
for the rapid diffusion of renewable energy that have arisen as the technology has developed and become increasingly economically competitive,
despite the recent environment of declining fossil-fuel prices. Specifically,
this book focuses on what can be called the stage-two challenges and
opportunities facing renewables.
Stage one was about commercializing newly developed renewable technologies, especially solar PV and large-scale wind power, driving down
their costs and making them a viable power source. If one policy encapsulates this period, it is the Feed-in-Tariff (FIT), that guaranteed above
market rates for renewable electricity over multiple years, but with the rate
for new installations gradually declining over many years. FIT schemes
and related policies have been very successful in many countries, so much
so that new challenges have emerged to the further diffusion of renewable energy, starting with the ability of grids to absorb all the variable
electricity being produced.