Reve
April 15, 2023
Synopsis
The fourth annual Global Electricity Review by Ember reveals
that renewable energy sources like wind and solar have achieved a 12% share of
the global electricity mix, up from 10% in 2021, which helped to make the
carbon intensity of global electricity generation fall to a record low. The
study also shows that clean power growth is likely to exceed electricity demand
growth in 2023, resulting in a small fall in fossil generation, which would
mean 2022 hit “peak” emissions. Moreover, the levelized cost of electricity
from renewable resources like wind and solar is now cheaper than electricity
from thermal generators powered by coal, oil, or methane gas.
There is some question about whether the lofty goals of the
Biden administration to promote the adoption of electric vehicles will succeed
— they are ambitious — but there is no question that renewable energy — wind
and solar — are taking over from thermal generation when it comes to making
electricity.
The fourth annual Global Electricity Review from independent
energy think tank Ember is out and it has nothing but good news for fans of
wind and solar energy. The first finding in this year’s report is that the
carbon intensity of global electricity generation fell to a record low of 436
grams of CO2/kWh in 2022, the cleanest electricity ever. This was due to record
growth in wind and solar, which reached a 12% share of the global electricity
mix, up from 10% in 2021. Together, all clean electricity sources (renewables
and nuclear) reached 39% of global electricity, a new record high.
Solar generation rose by 24%, making it the fastest growing
electricity source for 18 years in a row. Wind generation grew by 17%. The
increase in global solar generation in 2022 could have met the annual
electricity demand of South Africa, and the rise in wind generation could have
powered almost all of the UK. Over sixty countries now generate more than 10%
of their electricity from wind and solar. However, other sources of clean
electricity dropped for the first time since 2011 due to a fall in nuclear
output and fewer new nuclear and hydro power plants coming online.
The second major finding in this year’s report is that wind
and solar are slowing the rise in power sector emissions. If all the
electricity from wind and solar instead came from fossil generation, power
sector emissions would have been 20% higher in 2022. The growth alone in wind
and solar generation (+557 TWh) met 80% of global electricity demand growth in 2022
(+694 TWh).
Clean power growth is likely to exceed electricity demand
growth in 2023. This would be the first year for this to happen outside of a
recession. Ember says that “with average growth in electricity demand and clean
power, we forecast that 2023 will see a small fall in fossil generation (-47
TWh, -0.3%), with bigger falls in subsequent years as wind and solar grow
further. That would mean 2022 hit ‘peak’ emissions. A new era of falling power
sector emissions is close.” (emphasis added)
Ma?gorzata Wiatros-Motyka, senior electricity analyst for
Ember, sums it up succinctly: “In this decisive decade for the climate, it is
the beginning of the end of the fossil age. We are entering the clean power
era. The stage is set for wind and solar to achieve a meteoric rise to the top.
Clean electricity will reshape the global economy, from transport to industry
and beyond. A new era of falling fossil emissions means the coal power
phasedown will happen and the end of gas power growth is now within sight. Change
is coming fast. However, it all depends on the actions taken now by
governments, businesses and citizens to put the world on a pathway to clean
power by 2040.”
Lazard, which specializes in financial advice and asset
management, conducts a regular revue of what is known in the utility industry
as the levelized cost of energy. For those who may not know exactly what that
means, here is how the folks at Wikipedia explain it:
“The levelized cost of electricity (LCOE) is a measure of
the average net present cost of electricity generation for a generator over its
lifetime. It is used for investment planning and to compare different methods
of electricity generation on a consistent basis.
“The LCOE ‘represents the average revenue per unit of
electricity generated that would be required to recover the costs of building
and operating a generating plant during an assumed financial life and duty
cycle’, and is calculated as the ratio between all the discounted costs over
the lifetime of an electricity generating plant divided by a discounted sum of
the actual energy amounts delivered.
“Inputs to LCOE are chosen by the estimator. They can
include the cost of capital, decommissioning, fuel costs, fixed and variable
operations and maintenance costs, financing costs, and an assumed utilization
rate.”
Some might refer to it as the bottom line. Taking all
relevant factors into account, how much does it cost to generate the
electricity we use to power our world?
The latest LCOE study from Lazard says it clearly —
renewable energy from wind and solar resources is cheaper than electricity from
thermal generators powered by coal, oil, or methane gas. Period. Full stop.
(See the chart above.)
The latest report focuses on the United States but
Australia’s Renew Economy says the results are applicable to most global
markets as well. Its findings show renewables like wind and solar out-compete
coal, oil, and gas even when utility scale storage is taken into account.
Lazard has been saying the same thing since 2019.
Renew Economy can be a trifle snarky at times, and
deservedly so. “It is now well understood by all bar Sky News viewers in
Australia that wind and solar offer by far the cheapest form of generation,
even when ‘firmed’ by storage and including transmission costs. This is
critically important given that Australia has to replace its ageing and
increasingly decrepit coal plants, even if climate change was not a factor.”
For those who don’t live Down Under, Sky News is to Oz what Fox News is to
America and has the same owner.
The Power Of Policies
The Lazard assessment shows that by virtually any assessment
— cost of energy, cost of energy and firming, marginal cost of energy, and cost
of capital — wind and solar win easily. And that’s without counting the carbon
cost of their competitors and the impact of the Joe Biden’s Inflation Reduction
Act, which has added tens of billions of new financial incentives to the mix.
“The central findings show, among other things, that even in
the face of inflation and supply chain challenges the LCOE of best in class
renewables continues to decline,” Lazard notes.
The Takeaway
Reactionaries are always screaming about the free market and
a level playing field. Well, the proof is in the pudding. If anyone builds new
generating capacity that is powered by coal, oil, or coal, it is like pissing
money away and costing ratepayers dearly. (Forget about nuclear, whose LCOE is
many multiples of wind and solar.)
The Ayn Rand free market types will have to find some other
reason to oppose wind and solar. These numbers don’t lie. The least expensive electricity
comes from wind and solar. The fact that it also lowers carbon emissions
dramatically is just the icing on the cake.
Written BySteve Hanley
Source: www.evwind.es
energygasoil@gmail.com
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