Since the Industrial Revolution, fossil fuels have dominated the global energy supply. However, in recent years, the decline of renewable energy prices has initiated a global transition away from fossil fuels, as seen in Rhode Island, where wind and solar energy are spearheaded by the innovative company, Green Development LLC.
Renewables Are Becoming More Economically Competitive
While the marginal cost of producing fossil fuels like oil, coal, and gas has been increasing, the price of renewable energy alternatives like solar and wind has fallen. As an increasing number of utilities have adopted renewable energy portfolio standards, renewable energy installations have become more economically competitive than fossil fuels.
Greater economic competition and the emergence of global policies like the Paris Climate Accord have created a surge in renewable energy production. The International Renewable Energy Agency says that renewable energy projects have outperformed fossil fuels since 2015. Furthermore, in 2019 alone, nearly 72 percent of the newly added global power generation came from renewables rather than fossil fuels.
Renewable Energy Is Already Cheaper
A recent report published by the International Renewable Energy Agency highlights how renewable sources of energy are already cheaper than fossil fuels in many countries worldwide.
The report also underscored that 77% of wind power projects and 83% of other utility-scale renewable energy projects planned in 2020 would generate cheaper electricity than fossil fuels. However, it is essential to note that this report was developed before the global coronavirus pandemic, which decimated the fossil fuel industry and led to even more significant gains in the renewable energy industry.
Prices Keep Falling
When evaluating the cost of renewable energy, solar PV and onshore wind are often seen as the most attractive renewables. For example, the cost of power generated from onshore wind will typically range between $0.03-0.04/kWh. The price of solar PV has also dropped to $0.03/kWh across various countries like Chile, Mexico, and Saudi Arabia.
Even traditionally expensive renewable energy forms like concentrated solar power (CSP) are becoming more competitive against fossil fuels. The CSP electricity generation cost now ranges between $0.10/kWh to $0.27/kWh.
The Impact of the Coronavirus Pandemic
Many energy industry analysts say that the coronavirus pandemic may be a permanent turning point for the renewable energy industry. While in 2020, fossil fuel consumption tumbled significantly, the renewable energy industry continued to make gains.
Easy access to electrical grids and exceedingly low operating costs created the perfect opportunity for renewables to continue to grow over the past year. Moreover, as global policymakers continue to support initiatives to cut carbon emissions, new financial incentives may be coming for renewables.
What Does the Future Hold?
In the fossil fuel industry, a complex array of supply chains, manual laborers, and raw materials are needed to keep power plants functioning. In comparison, generating electricity from renewable energy does not require the same supply chains and raw materials input—instead, renewable energy is supplied by natural sources such as wind, sunlight, or flowing water.
About Green Development
Green Development LLC is the leading developer of utility-scale renewable energy projects in Rhode Island, specializing in wind, solar, and battery storage. The company delivers significant energy savings to municipalities, quasi-public organizations, nonprofits, and other qualified entities through the virtual net metering program, all while providing long-term lease payments to landowners and farmers.