The future of renewables is already here

April 23, 2014


The gradual transformation of the International Energy Agency into something of a climate hawk, green in tooth and claw, seems to be continuing. The IEA, once known for its unswerving adherence to fossil-fuel orthodoxy, published a new report this week, arguing forcefully that large-scale renewable energy is reliable, achievable, and - most importantly - won't break the bank. Three findings of the report tie in to some of the arguments that we at the Climate Parliament have been making in our parliamentary campaigns around the world. 

The first is that large amounts of renewable energy - up to 45% of total supply - can be achieved by any country at only a small increase in total costs, compared with a fossil-fuel dependent business-as-usual scenario. What makes this conclusion even more exciting (at least, for renewable policy geeks like me) is that the IEA used present-day costs for solar PV and wind in its calculations - meaning that as costs continue to fall, large-scale integration can only get cheaper. Great news, and a timely rejoinder to critics who insist that renewables are too expensive and too unreliable to be used on a large scale. 

In fact, the IEA found that installing the first 5-10% of renewable capacity should pose "no technical or economic challenges at all" for both developed and emerging economies. Given the fact that renewable sources currently contribute only 3% of the world's energy supply, the IEA's argument that barriers to entry are essentially non-existent is both heartening, and slightly frustrating: if it's so easy to do, why aren't more countries doing it?

Perhaps the answer lies in the report's second interesting argument: that, for renewables to perform most cost effectively, they must be carefully integrated into a "transformed" national power system, rather than just tacked on top of a "business as usual" grid framework.

The IEA argues that proper renewable integration requires careful thought about using renewables in a way that "supports" the grid. This involves investing in additional flexible generating capacity, developing accurate advanced forecasting to manage supply, improving the operation of electricity markets, and increasing energy storage. Denmark, for example, is a great example of a "transformed" power system, where coal utilities have been retrofitted to provide quick ramp up power, and large-scale civic electric boilers are carefully integrated to take surplus supply out of the grid on windy days. 

The final important argument from the IEA study is that high levels of renewable integration are equally possible - and equally affordable - in both developed and less-industrialised economies. Sustainable energy really can be for everyone, not just rich countries!

In developed markets, the main challenge is paying for stranded assets as fossil plants have to be retired early. But in what the IEA refers to as "dynamic markets" (ie: India, Africa etc where demand already outstrips supply), wind and solar can be introduced even more cost effectively, because the issue of sunk costs doesn't exist on the same scale. Thanks to this, the “dynamic” economies can leap-frog to a sustainable modern power system – and reap the benefits of doing so. 

It's great to see an organisation long associated with fossil fuels taking such an aggressively pro-renewables stance, and fits the pattern of traditionally conservative, free-market global organisations - such as the World Bank and the IMF - coming out of the climate closet and advocating action over the last eighteen months or so. It remains to be seen, however, whether this growing consensus amongst international bodies will translate into concrete steps at the national level; but it certainly can't hurt.  

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