Solar Energy Soon to Surf the Wave of Profitability
Profits for Healthy Oceans
Solar, wind, batteries, hydrogen are the four Musketeers of our clean energy future, which will protect our oceans from the effects of global warming. On June 15, the latest Bloomberg Energy Report concluded that renewable energy will soon be more profitable than coal or oil. The energy transition will soon surf the wave of profitability.
As global temperatures rise, our oceans are dying. The Antarctic ice caps are melting at a dramatic rate, 70% of the Great Barrier Reef’s coral is irreversibly bleached, and the oceans are acidifying. The entire food chain—from plankton to the largest marine mammals—is under threat. In the face of these changes, scientists are unanimous: we must stop consuming fossil fuels. Today, there is hope for the transition to clean energy. Race for Water vessel is proof that a mix of renewable energies is a viable alternative. This verdict is supported by a report that Bloomberg New Energy Finance (BNEF) released a few weeks ago. The report’s conclusions are unequivocal: solar and wind energy will supply more than a third of the world’s energy by 2040.
BNEF phrased its predictions eloquently: dramatic decreases in the production costs of solar energy mean that in only five years, renewable energy will be cheaper than coal in many countries, including China, the UK, and India.
Solar and wind energy will achieve a competitive edge by receiving 72% of worldwide investment in new electricity production between now and 2040. BNEF values that investment at $7.4 billion, according to an analysis of the field data that it compiles each year when preparing its report on the future of energy. “Costs of new energy technologies are falling in a way that it’s more a matter of when than if,” says the report’s lead author Seb Henbest, quoted in an article on Bloomberg’s website. Still, it’s important to remember that these projections are for informational purposes only, and that there are lots of unknown.
Investing in a clean future
Large-scale development of renewable energy will require world leaders to invest substantially in the energy sector. In a speech at Oxford University on March 22, Shell CEO Ben van Beurden stated that, “Of course, the energy transition is change on a global scale, and it must be embraced too. It is unstoppable. Every element of society—including Shell—has a role to play.”
According to Bloomberg’s data, the cost of electricity produced by photovoltaic panels has decreased nearly 75% since 2009, and is on track to decrease an additional 66% by 2040. Onshore wind energy production costs have decreased 30% since 2009, and should decrease 47% during the timeframe that the report looks at.
We must progress beyond the fossil-fuel energy model of energy on demand, toward a world where energy is produced cleanly. The challenge is that renewable energy is subject to natural fluctuations. For example, without viable long-term storage technologies, it is difficult to meet Northern Europe’s energy demands in the winter when there is very little daylight. Storing surplus solar or wind energy and redistributing it as needed is the key to the energy transition.
Hydrogen, the final piece of the puzzle
On board the Race for Water vessel, hydrogen plays a key role: long-term storage of clean energy. In essence, the vessel operates like a mini-country that has chosen to completely eliminate fossil fuels through a mix of clean energies and innovative energy storage technologies. “Hydrogen is one of the best options for long-term storage of renewable energy. Development of these technologies is crucial to the transition to fully-renewable energy systems,” says Mario Paolone, a researcher and professor at Switzerland’s Ecole Polytechnique Fédérale de Lausanne (EFPL).
This approach seems to have the wind in its sails, so to speak. In January 2017, 13 world leaders from the energy sector met for the first time. Representing companies such as Shell, Toyota and Air Liquide, they joined together to form the Hydrogen Council. Together, they have committed to promote hydrogen’s key role in fighting climate change. This commitment shows that these business leaders are aware of the critical state of our planet; it is also a sign of the economic reality that will move us toward a clean future.