{"id":28869,"date":"2020-07-06T11:15:21","date_gmt":"2020-07-06T15:15:21","guid":{"rendered":"https:\/\/test.greenmoney.com\/2025\/?p=28869"},"modified":"2020-07-06T11:15:21","modified_gmt":"2020-07-06T15:15:21","slug":"the-outlook-for-renewable-energy","status":"publish","type":"post","link":"https:\/\/test.greenmoney.com\/2025\/the-outlook-for-renewable-energy\/","title":{"rendered":"The Outlook for Renewable Energy"},"content":{"rendered":"
>> Back to July 2020 Issue<\/a><\/div>\n

\"Dana-Investment-Advisors-Logo\"The last decade was quite a remarkable period for renewable energy growth. In 2019, estimates indicate new capacity additions were slightly more than 70 percent renewables and over half of newly commissioned utility-scale renewable power generation provided electricity at a lower cost than the cheapest new fossil fuel powered source.[1]<\/span>These are significant milestones, especially so, given that they are driven by the incredible cost declines that occurred during the decade. The chart below illustrates these cost declines and Solar Photovoltaic (PV) electricity generation stands out with the most dramatic decline, approximately 80 percent. Expectations over the next few years are for further price declines across renewables.<\/p>\n

\"Renewable<\/p>\n

Let us step back and review the efforts and circumstances that brought us to this point. In retrospect it may look obvious and predictable. Yet in 2010, the global economy was still recovering from the financial crisis. Also, a significant amount of venture capital investment in renewable technologies in the U.S. were made in 2006-07, only to be written off over a multiyear period post crisis. It turned out that renewable energy technology was more energy than technology and lofty valuations, high costs, and much needed subsidies were significant hurdles to new investments, certainly in the U.S. Prior to the crisis, many European countries made great strides in deploying renewables, supported by various programs and subsidies.<\/p>\n

Fast forward to the middle of the last decade, and cost declines in solar PV were taking hold. Investors could see the potential competitiveness of this renewable source. The laws of supply and demand would drive the growth providing a transition to a low-carbon economy. Battery storage prices, vital to deploying renewables, also experienced price declines. These factors gained traction and greater renewables growth did indeed occur.<\/p>\n

What drove these cost declines?<\/strong> The cost curves pictured in the chart above depict the levelized cost of energy<\/em> (LCOE), often referred to as the levelized cost of electricity.<\/em> LCOE is the average total cost of project per unit of total electricity generated. The LCOE allows one to compare various energy-producing sources on a \u201clevel\u201d playing field. It also illustrates the breakeven point of a project. It works as a net present-value calculation and allows developers to compare lifetime costs. Thus, many assumptions are embedded in these calculations.<\/p>\n

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