Blog Post Wednesday 03 October 2018
Renewable energy draws on natural resources that are continuously replaced and don't run out. Given challenges like climate change and public health, renewable energy offers an attractive, clean option for our energy-intensive world. The renewable energy industry is always changing, and with new technologies and innovation driving adoption, 2018 and beyond looks likely to have some fascinating trends for the renewable sector.
Solar energy is probably the most well-known renewable energy technology, but the use of wind energy is also widespread. Hydropower, geothermal, bioenergy, ocean or tidal energies are some of the other renewable technologies used around the world today. Each type of renewable technology has its own pros and cons. Countries like Iceland, Norway, and Costa Rica have maximised investments and leveraged natural endowments to become almost 100% renewable. Enabling technologies like battery storage, supply prediction, and smart-grid technologies are also important drivers of renewable energy trends.
2018 and beyond looks to be a period of expansion for the renewables sector:
Renewable energy costs are on a downward trajectory, with, for example, solar prices dropping by 62% since 2009 and wind costs halving in recent years. Record-low prices at power auctions are another sign competition will likely keep pushing prices down in the sector.
Parallel to falling costs is an accelerating shift to adoption and divestment, with a reduction in coal generation and some gas and oil. Businesses are making bold commitments, with UK giants like Apple and Goldman Sachs announcing ambitious targets. The growth of the sector is also reflected in the renewables energy generating more jobs, including nearly 5,000 new roles in Australia in 2018.
The solar energy boom set new records in Australia in 2017, and 2018 and beyond is likely to see the same record-breaking trends. A total of 1340MW of solar PV was installed in 2017 and by 2018, solar is likely to reach 3580MW.
Technology is a powerful enabler of renewable energy, with blockchain one of the most notable and promising technology trends. As an example of how blockchain can be used to support renewables, a planned project in Melbourne will integrate blockchain technology to allow solar system owners to trade excess energy.
Solar power is also a driving force in transport industry. A project in New South Wales is an example of how renewable energy can be used to power not just cars but even vintage trains. The old rattlers have been converted and upgraded to run on solar energy much like electric buses, and the power is generated from panels at the station and on the train roofs.
China is the world's leader in solar power, with its solar PV capacity growing 800 times in the past decade. The world's most populous country is also investing big in wind, and by 2020 the PRC aims to have invested £292 billion (AUD $517 billion) in renewable power. Other ambitious plans include caps on coal burning and major carbon-capture-and-storage projects.
Storage is a key enabling technology for renewables, and one ongoing trend is increased competition and growing installation. Tesla's Nevada gigafactory, the world's biggest battery factory, will be completed by 2018. China aims to generate capacity to provide almost 120 gigawatt-hours of battery cells a year by 2021, and other countries like Sweden, Hungary, Poland, Germany, and the UK also have ambitious storage or R&D targets.
Storage pilot, demonstration and trial projects to drive greater innovation are happening all around the world. In Australia, battery costs have declined dramatically while battery installations have leapt. Other storage innovations include community big batteries that connect houses to share energy to the grid when required.
A possible source of constraint for renewable are rising interest rates. Record low rates in recent years have boosted investment in the sector, but the trend towards higher rates could impact renewables by driving up costs and reducing the amount of available capital.
Current and future trends for renewables tend towards the positive and expansionary, with costs falling and innovation, technology, and adoption growing. While a return to higher interest rates could be a constraining factor, the acceleration of renewable energy, with major trailblazers like China leading the way, looks likely.