Solar And Wind Power Have Become Affordable!

In today’s world of constant change and technological advancements, we have witnessed a rise in pollution, and exhaustion of natural resources. The world is getting hotter, while we continue to pollute and degrade our planet. Ecosystems are being destroyed, and wastelands are filling up to their brim. To put it into perspective, according to National Geographic scientists, Alaskan glaciers are melting one hundred times faster than was previously thought. The world’s population is rising exponentially, leading to an increase in the number of vehicles on roads, and in turn the consumption of petrol and diesel.

Coal too is on the wane, and it is high time we find alternatives to these natural resources. It will not be long before we exhaust their supplies, and find ourselves at a crossroad, not knowing where to go. We need to phase out our use of these resources, find alternatives, and bring them to action, sooner rather than later. While these alternatives are likely to be quite expensive initially, their mass production will bring down prices, and lead to a more sustainable way of living, lesser pollution, global warming, and human afflicted animal- causalities. Luckily, according to TradingBeasts commodity guide, solar and wind power have become more affordable.

Renewable Energy Economics Are Fast Improving

In the midst of news regarding pollution, climate change, and the devastation of natural habitats, the economics of renewable energy sources is fast improving. According to research conducted by Lazard, onshore wind power and utility-scale solar power is becoming cheaper to generate. The cost of generating energy from large solar projects has reduced by 7% since 2018, and by 4% for wind projects. The cost of an energy technology in question, is the break-even price that a company investing in that particular technology needs, in order to see a competitive return rate. A shining light indeed, when it comes to onshore wind power and utility-scale solar power, this rate has dropped to $40 per megawatt hour.

This is much lower than the costs levied while building power plants that burn coal and natural gas. This is quite close to being competitive with the costs of running the plants that already in place. Considering the fact that non-renewable resources are rapidly declining, the economics to back investors into investing in onshore wind power and utility-scale solar power is fast improving, Adapting mass change now, is the need of the hour. We need technological innovation to adopt and run on this energy, before commodity investors will seek this opportunity and spark a change.

What Has Brought This Change?

There are several forces that have led to this change. These include a reduction in capital costs, and steady improvement in the technology running and producing these renewable sources of energy. The rate of decline of the economic costs required to run onshore wind projects stands at 7% a year, while that of solar power stands at 13% a year, solar energy being more abundantly used of the two.

When you take into consideration federal incentives for renewable energy, with governmental subsidies, the average cost of onshore wind generation is $28 per megawatt hour, and that of utility-scale solar energy is $36 per megawatt hour. Compare that to coal which stands at $34 per megawatt hour, and $29 per megawatt hour for nuclear generation, and there is not much of a difference. With federal incentives in place, it makes sense to build new solar and wind facilities, and slowly phase out coal and nuclear plants. We can reduce the consumption of fossil fuels without undue economic disruption.

Problems

Unfortunately, renewable energy prices are not favourable everywhere. There are some regions better suited to some resource producing outlets than others. For example, there will be a greater return of solar produced energy in regions with a large amount of sunlight falling over a longer duration of time. For wind energy, regions with high wind rates, over a long period of time in a day, are more favourable than others. Regional differences may lead to higher rates of production, rendering solar and wind energy unsuitable for that region, cost wise.

Even if solar and wind energy is produced at a cost effective rate, these energy sources are not enough to provide all the power that is needed to run all machinery and appliances in a region. A variety of different technologies need to be put in place, co-existing with solar and wind energy. For the foreseeable future, these two renewable resources are not enough, no matter how cost-effective they may be.

Conclusion

Solar energy and wind energy are commendable sources of renewable energy. Recent developments have seen the price of generation of these resources fall greatly. They can serve as valiant competitors to existing sources of energy, like petrol and coal. Fossil fuels must be phased out gradually, as their exhaustion is a surety, for which we must be prepared. While solar and wind energy are not enough to replace non-renewable energy sources, research is underway to find alternative sources of energy to compliment them, and bring a greater change.