When will renewable energy become dominant?
The LR 2018 Technology Radar — Renewable Energy study, published by Lloyd’s Register, asks the question: when will renewable energy become the dominant source of energy? The study also examines which technologies are likely to have the greatest impact in different countries and the key drivers and inhibitors for success.
The report analyses the impact of renewable energy in the next five years and beyond, providing answers from industry experts on their optimism, concerns and investment outlook on tomorrow’s energy mix. The research sought the insights and opinions of leaders across the sector, as well as a survey of 800 professionals and experts around the world.
Key findings include:
- Respondents expect grid parity for solar to be achieved first in China (2022), followed by Spain and UAE in 2024, and by Australia and the US in 2025. For wind power generation, grid parity is expected in Germany and UK by 2024, USA and Denmark in 2025 and Sweden by 2033.
- Although a minority of respondents (10%) believe that renewables have already overtaken fossil fuels in their country, or will do so in the next two years, 58% believe that this milestone will not be reached until after 2025.
- Renewable economics are improving, but 62% of respondents say that high development costs remain the primary argument against pursuing renewables in their country. However, the cost of building solar capacity for utility-scale generation has more than halved in the past 10 years, which has helped to fuel the rapid expansion of solar capacity worldwide since 2014.
- More than 45% of the surveyed executives (including 55% of those based in Europe) say that resistance to onshore wind turbines in their countries is too strong to enable significant growth from this source.
- 71% agree that technology advances will do more in the next five years to improve the economic case for renewables than policy or regulatory changes. However, 36% identify policy inconsistency as an inhibiting factor.
- 37% of respondents indicate the slow development of storage technologies as the most important factor inhibiting the growth of renewables in the energy mix. Utilities need to be able to call on energy producers for additional power whenever it is required, whether for load balancing or meeting surges.
- 42% of respondents agree that reaching grid parity will not be enough to cause a sustained increase in investment in renewables. Subsidies are critical to support developments in most markets.
“I am heartened by the optimistic outlook and by the measured and realistic approach that is displayed throughout the results and insights in this year’s research,” said Karl Ove Ingebrigtsen, director of LR’s Low Carbon Power Generation business.
“It illuminates the outlook for renewable energy — and highlights the technologies that are expected to deliver the greatest impact, especially in grid transformation which must be based on a sound understanding of each country’s individual ecosystem; it is clear that this is advancing alongside technology, policy and investment.”
This is the fourth year LR has conducted its Technology Radar research and the first time it has concentrated on the renewable energy sector. The research delivers insights that will help to inform industry debate and energy policy across the world, and may help to raise further discussions on areas such as standardisation and putting a price on carbon that treats all carbon equally.
“We are seeing a real shift in thinking by the oil and gas majors as they increase their renewable energy portfolio and diversify their offering in the market,” said Ingebrigtsen. “The halcyon days of high oil prices scuppering renewable energy growth and development is a distant memory; the energy industry is on a new low carbon growth and efficiency drive which will change the source of our energy supply forever.”
To download the 2018 Technology Radar report, visit https://www.lr.org/techradar.
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