The Cost Of Renewables Continues To Plummet
According to a new report from the Institute of New Economic Thinking at the University of Oxford, previous estimates about how quickly the price of renewables will fall have consistently underestimated reality (We think they are pointing their fingers at the International Energy Agency here.)
Here’s the first few paragraphs of the report:
“Rapidly decarbonizing the global energy system is critical for addressing climate change, but concerns about costs have been a barrier to implementation. Most energy economy models have historically underestimated deployment rates for renewable energy technologies and overestimated their costs. The problems with these models have stimulated calls for better approaches and recent reports have made progress in this direction.
“Here we take a new approach based on probabilistic cost forecasting methods that made reliable predictions when they were empirically tested on more than 50 technologies. We use these methods to estimate future energy system costs and find that, compared to continuing with a fossil fuel based system, a rapid green energy transition will likely result in overall net savings of many trillions of dollars (emphasis added) — even without accounting for climate damages or co-benefits of climate policy.
“We show that if solar photovoltaics, wind, batteries and hydrogen electrolyzers continue to follow their current exponentially increasing deployment trends for another decade, we achieve a near-net-zero emissions energy system within twenty-five years. In contrast, a slower transition (which involves deployment growth trends that are lower than current rates) is more expensive and a nuclear driven transition is far more expensive.
“If non-energy sources of carbon emissions such as agriculture are brought under control, our analysis indicates that a rapid green energy transition would likely generate considerable economic savings while also meeting the 1.5 degrees Paris Agreement target.
“Future energy system costs will be determined by a combination of technologies that produce, store and distribute energy. Their costs and deployment will change with time due to innovation, economic competition, public policy, concerns about climate change and other factors.”
“It’s not just good news for renewables. It’s good news for the planet,” co-author Matthew Ives, a senior researcher at the Oxford Martin Post-Carbon Transition Program, tells ArsTechnica. “The energy transition is also going to save us money. We should be doing it anyway.”
“Our approach is based on two key design principles: 1) include only the minimal set of variables necessary to represent most of the global energy system, and the most important cost and production dynamics, and 2) ensure all assumptions and dynamics are technically realistic and closely tied to empirical evidence. This means that we focus on energy technologies that have been in commercial use for sufficient time to develop a reliable historical record.
“We choose a level of model granularity well suited to the probabilistic forecasting methods used, i.e. one that allows accurate model calibration, and ensures overall cost reduction trends associated with cumulative production are captured for each technology. Our model design can be run on a laptop, is easy to understand and interpret, and allows us to calibrate all components against historical data so that the model is firmly empirically grounded. The historical data does not exist to do this on a more granular level.”
Omitted Technologies
“Consistent with our two design principles, we have deliberately omitted several minor energy technologies. Co-generation of heat, traditional biomass, marine energy, solar thermal energy, and geothermal energy were omitted either due to insufficient historical data or because they have not exhibited significant historical cost improvements, or both.
“Liquid biofuels were also excluded because any significant expansion would have high environmental costs. Finally, carbon capture and storage in conjunction with fossil fuels was omitted because i) it is currently a very small, low growth sector, ii) it has exhibited no promising cost improvements so far in its 50 year history, and iii) the cost of fossil fuels provides a hard lower bound on the cost of providing energy via fossil fuels with CCS. This means that within a few decades, electricity produced with CCS will likely not be competitive even if CCS is free.” (emphasis added)
Massive Storage Capacity
“Since renewables are intermittent, storage is essential. In the Fast Transition scenario we have allocated so much storage capacity using batteries and P2X fuels that the entire global energy system could be run for a month without any sun or wind. This is a sensible choice because both batteries and electrolyzers have highly favorable trends for cost and production.
“From 1995 to 2018 the production of lithium ion batteries increased at 30% per year, while costs dropped at 12% per year, giving an experience curve comparable to that of solar PV. Currently, about 60% of the cost of electrolytic hydrogen is electricity, and hydrogen is around 80% of the cost of ammonia, so these automatically take advantage of the high progress rates for solar PV and wind.”
Final Energy
“To understand these scenarios it is important to distinguish final energy — which is the energy delivered for use in sectors of the economy — from useful energy, which is the portion of final energy used to perform energy services, such as heat, light and kinetic energy.
“Fossil fuels tend to have large conversion losses in comparison to electricity, which means that significantly more final energy needs to be produced to obtain a given amount of useful energy. Switching to energy carriers with higher conversion efficiencies (e.g. moving to electric vehicles) significantly reduces final energy consumption.
“Our Fast Transition scenario assumes that eventually almost all energy services originate with electricity generated by solar PV and wind, making and burning P2X fuels or using batteries when it is impractical to use renewables directly. The Fast Transition substantially increases the role of electricity in the energy system.”
The INET report focuses mainly on the process of technological advancement, which is part of what has made renewables cheaper. Renewables have routinely performed beyond the expectations of previous papers. “They’ve been getting these forecasts wrong for quite some time,” Ives said. “You can see we’ve consistently broken through those forecasts again and again.”
Rather than a plateau on renewable energy costs, Ives said the greater likelihood is that the prices will decrease slower once things like solar and wind end up dominating the market. At that point, technological advances may very well still happen, but they might not be rolled out as frequently as they are now. “It’s the deployment that slows it down,” Ives says.
Michael Taylor, senior analyst at IRENA, agrees. He tells ArsTechnica his organization found that the cost reduction drivers — improved technology, supply chains, scalability, and manufacturing processes — for solar and wind are likely to continue at least for the next 10 to 15 years. With regard to previous forecasts, he says, “I would expect they’re overly pessimistic.”
Unforeseen issues such as the global pandemic and supply chain woes could slow the decline in the cost of renewables, as well as other barriers such as oil and gas subsidies, public opinion, permitting, and political considerations. “Just on purely economic grounds, there are increasing benefits to consumers to be had by accelerating the roll out of renewable power generation,” Taylor says. “We encourage policymakers to look very seriously at trying to remove the barriers that currently exist.”
The Takeaway
The report from the Institute of New Economic Thinking is a breath of fresh air. In particular, it explodes all the tripe being trotted out by fossil fuel companies to justify the continued use of their products. Carbon Capture? Pure baloney, a chimera they can hide behind while the continue their relentless greenwashing campaigns.
INET envisions consumers saving trillions of dollars as renewable energy takes over from thermal generation. The bottom line is we must stop burning fossil fuels as soon as possible if we want to keep the Earth habitable for humans. This report comes just in time for the COP 26 climate conference in Glasgow. In a rational world, global leaders would seize upon it as justification for moving forward aggressively with favorable renewable energy policies.
That’s unlikely. Those political leaders are beholden to fossil fuel companies, so expect a lot of rending of garments and gnashing of teeth as they try to spin their way out of the obvious. The only thing we as renewable energy advocates can hope for is that the price of renewables will get so low that anyone with the acumen of kumquat will have to recognize the truth. Ultimately, those free market imperatives reactionaries are so fond of will drive a stake through the heart of their beloved fossil fuel industry. We can’t wait!
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Global renewable developer and energy giant RWE has halted its US offshore wind operations “for the time being” because of the “political environment” the Trump administration has created.
RWE, Germany’s biggest electricity producer, said in March that it had dialed back its US offshore wind activities. But now, CEO Marcus Krebber said in a speech transcript, which he’ll deliver at the company’s Annual General Meeting in Essen on April 30, that its US offshore wind business is now closed (but it wasn’t all bad news):
In the US, where we have stopped our offshore activities for the time being, our business in onshore wind, solar energy, and battery storage has so far been developing very dynamically. At the start of this year, we reached an important milestone when our US generation capacity hit the 10 gigawatt mark. The construction of a further 4 gigawatts is secured.
He went on to say that renewables have created regional value and jobs, but that the company remains “cautious given the political developments.” RWE has introduced more stringent requirements for future US investments:
All necessary federal permits must be in place. Tax credits must be safe harbored and all relevant tariff risks mitigated. In addition, onshore wind and solar projects must have secured offtake at the time of the investment decision. Only if these conditions are met will further investments be possible, given the political environment.
About half of RWE’s installed renewable capacity is in the US, where it’s the third-largest renewable energy company through its subsidiary, RWE Clean Energy. RWE holds the rights to develop US offshore wind projects in New York, Louisiana, and California.
RWE paid $1.1 billion for the New York lease area in 2022, where it’s meant to develop the 3 gigawatt (GW) Community Offshore Wind with the UK’s National Grid. Community Offshore Wind was projected to come online in the early 2030s and expected to power more than a million homes.
The developer paid $5.6 billion for the Louisiana lease in the Gulf of Mexico in 2023 as the lone bidder for development rights, and the Canopy Offshore Wind project off Northern California was not expected to be completed for another decade.
Read more: Trump admin halts $5 billion NY offshore wind project mid-build
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It’s that time of year again, time for events across the country to show off electric vehicles at Drive Electric Earth Month.
Drive Electric Earth Month is an offshoot of Drive Electric Week, a long-running annual tradition hosting meetups mostly in the US, but also occasionally in other countries. It started as Drive Electric Earth Day, but since not every event can happen on the same day, they went ahead and extended it to encompass “Earth Month” events that happen across the month of April. It’s all organized by Plug In America, the Sierra Club, the Electric Vehicle Association, EV Hybrid Noire, and Drive Electric USA.
Events consist of general Earth Day-style community celebrations, EV Ride & Drives where you can test drive several EVs in one place, and opportunities to talk to EV owners and ask them questions about what it’s like to live with an EV, away from the pressure of a dealership.
This month, there are 158 events registered across the US and 1 in Mexico (including one online webinar about things to consider when purchasing an EV).
Events have been happening all month, but the biggest weekend is this upcoming one, APril 26-27.
One really neat event was the Asheville event, which showcased the resiliency of EVs in an area devastated by Hurricane Helene, which was made more severe by climate change. That event was attended by the Rivian R1T which famously got dragged 100 feet submerged in mud and came out running fine.
But the bulk of the events happened on the weekends surrounding Earth Day, April 22, so there were several last weekend and will be even more this upcoming weekend.
There are plenty of events in the big cities where you’d expect, but Plug In America wanted to highlight a few of the events in smaller places around the country. Here’s a sampling of upcoming events:
- Big Island EV – Cruise and Picnic in Waimea, HI on April 26, 10am-1pm – EV drivers will congregate in various places around the Big Island (Kona, Waimea, Waikoloa and Hilo), then drive up Saddle Road to the Gil Kahele Recreation Area on Mauna Kea for a potluck and a chance to talk about the experience of owning EVs on the Big Island.
- Santa Barbara Earth Day 2025 and Green Car Show in Santa Barbara, CA on April 26-27, 11am-8pm – This is part of Santa Barbara’s Earth Day celebration, which routinely attracts 30,000 participants and is one of the longest-running Earth Day celebrations on the planet. The Green Car Show includes ride & drives and an “Owners Corner” where owners can showcase their EVs and attendees can check them out and ask questions.
- Earth Day’25 – EV’s role in a sustainable future in Queretaro City, Mexico on April 26, 9am-4pm – The sole Mexican event, this is a combined in-person/online seminar at the Querétaro Institute of Technology.
- Norman Earth Day Festival in Norman, OK on April 27, 12-5pm – Another municipal Earth Day festival, with hands-on activities for kids to learn about the environment. A portion of the parking lot reserved for an EV car show for EV owners who pre-register to show off their vehicles.
- Oregon Electric Vehicle Association Test Drive & Information Expo in Portland, OR on April 27, 10am-4pm – This one is at Daimler Truck’s North American HQ, and will have several EVs for test drives, owner displays (including DIY gas-to-EV conversions), and keynote presentations by EV experts. They’ll even have a 1914 Detroit Electric EV available for test rides!
- And, we at Electrek want to give a shoutout to Rove’s EV Drive Days in Santa Ana 10am-3pm April 28 – ROVE is the company behind the “full-service” EV charging concept that we’ve talked about several times here on Electrek, and we like what they’re doing for EV charging. They’ve hosted a few community events, and this is their contribution to Earth Month.
Each event has a different assortment of activities (e.g. test drives won’t be available at every event, generally just the larger ones attended by local dealerships), so be sure to check the events page to see what the plan is for your local event.
These events have offered a great way to connect with owners and see the newest electric vehicle tech, and even get a chance to do test rides and drives in person. Attendees got to hear unfiltered information from actual owners about the benefits and trials of owning EVs, allowing for longer and more genuine (and often more knowledgeable) conversations than one might normally encounter at a dealership.
And if you’re an owner – you can show off your car and answer those questions for interested onlookers.
To view all the events and see what’s happening in your area, you can check out the list of events or the events map. You can also sign up to volunteer at your local events, and if you plan to show off your electric car, you can RSVP on each event page and list the vehicle that you plan to show (or see what other vehicles have already registered).
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