For the first time ever, renewables demonstrated that they are more cost effective than fossil fuel power stations. This happened despite a number of high-profile, pro-fossil fuel policy setbacks in 2018, most notably in the United States, the United Kingdom and Australia. For example, despite Trump’s imposition of 30% tariff on imported solar panels and an attempted bailout of coal and nuclear power plants, solar has continued to thrive in the US.[1] According to Reuters, the number of utility-scale solar projects being built in the US has actually increased, with a record breaking 8.5 GW procured in the first half of 2018.[2]
At the same time, the cost of renewables is dropping rapidly and is expected to be a consistently cheaper source of electricity generation by as soon as 2020.[3] It is already becoming cheaper to build new renewables than it is to continue operating a conventional power stations with Lazard’s latest annual Levelized Cost of Energy Analysis showing that in some scenarios, the full-lifecycle costs of building and operating renewables-based projects have dropped below the operating costs alone of conventional generation technologies such as coal or nuclear.[4] It is estimated that 42% of fossil fuel power stations are currently running at a loss. In fact, it costs more to run 35% of coal power plants than to build new renewable generation.[5] So having a more renewables focused energy system would not only be better for the environment but would also benefit consumers’ pockets. This will no doubt to lead to rapid and significant deployment of renewable energy capacity.
Although renewables have demonstrated their resilience over the last year, hurdles remain to strengthening their business case in a non-subsidy environment as well as to addressing the operational challenges that currently limit their uptake. In order to address these challenges, Reactive Technologies has created innovation-led Power Purchase Agreements (PPAs) that optimise value for renewable generators across all available market opportunities as well as a unique inertia measurement and analytics service for grid operators that provides them with the visibility they need to safely integrate larger amounts of renewable generation.
If you are a renewable asset owner or a grid operator and would like to learn more about our offering, please contact us and we would be happy to set up a meeting with you.
[1] https://pv-magazine-usa.com/2018/12/20/2018-solar-power-year-in-review-part-1/
[2] https://www.reuters.com/article/us-usa-solar-idUSKCN1LT0EU
[3] https://www.forbes.com/sites/dominicdudley/2018/01/13/renewable-energy-cost-effective-fossil-fuels-2020/#1e5699954ff2
[4] https://www.lazard.com/perspective/levelized-cost-of-energy-2017/
[5] https://www.carbontracker.org/42-of-global-coal-power-plants-run-at-a-loss-finds-world-first-study/
