Although there is no definitive end date in sight it is pretty clear that the fossil fuel party is coming to an end, which is one good reason why investors are jostling for position and getting excited about renewable energy.
It has taken a while to develop renewable energy strategies and reliable sources of power to satisfy grid requirements but there are a growing number of industry insiders who believe that we have now reached a crucial point, where things could get exciting if you are invested in the technology.
Here is a look at some of the reasons why renewable energy has a bright future and what is behind the rapid growth of the industry. There are some stats and future predictions to mull over, plus a look at the reasons why renewable energy is getting close to overtaking oil and gas as the dominant force.
Close to double-digit electricity generation
Make no mistake, fossil fuels still rule the roost in percentage terms and with a new U.S president in place who is keen to see coal production continue and even rise where possible, you might think that renewable energy will be living in the shadows for a while longer.
However, a recent U.S Energy Information Administration (EIA) report confirms that non-hydropower renewable sources, mainly solar power and wind, are continuing to grab market share.
In 2016 renewables accounted for 8.5% of electricity generation and that is expected to rise to over 9% in 2017 and reach 10% sometime in 2018.
The report suggests that wind energy capacity is where the greatest growth is likely to be seen and it is anticipated that we are going to get close to 100 GW ( about 6.5% market share) within the next 24 months.
If you are wondering what opportunities this growth presents for active investors you might find some of those answers when you read an oilandenergyinvestor.com special report.
What is driving growth in renewables?
The simple and short answer to that question can be summed up in one word, technology.
There is no question that technological advances are primarily responsible for helping to reshape global energy markets and renewables in the shape of mainly solar and wind are becoming better placed all the time to step in and take over as a key global energy supplier.
The excitement surrounding the prospect of reaching 10% capacity by 2018 will reach even higher levels if some global energy consultants predictions are anywhere near accurate and renewables grab as much as a 35% share of global power generation over the next 15 years or so.
The reason for this level of optimism is not just based on technology but a change in the way we consume energy. A continuing rise in electric and autonomous vehicles and a shift in attitude towards how we heat and power residential and industrial buildings is all adding to a growing shift towards renewables and away from coal and gas.
We are steadily heading for a tipping point where wind and solar PV will overtake coal and gas.That point is predicted to be reached as early as 2025.
Clues are there
Even if you step back in time and look at the early days of renewables when the technology was not yet available to cope with large scale production at competitive prices, solar power generation has still managed to achieve stellar annual growth for the last 15 years.
If you take 2001 as a starting point, total solar generation has grown at an impressive 50% annual rate and wind-power generation has also managed an impressive annual growth rate of 24%.
China is betting its chips on renewables and is the world’s leading investor in renewables. If you want further evidence of that almost total commitment to what they see as the future of energy, the fact that they have publicly stated their intention to shut 85 coal plants and invest $350 billion in renewables sources of energy, speaks volumes.
Storage issues addressed
What could be viewed as one of the last but almost most important aspects of renewable energy that allows it to be in a position to overtake oil and gas as the dominant force, is storage capacity and efficiency.
It is obvious to say, but the sun doesn’t shine 24 hours a day and the wind isn’t always blowing hard, so you need to have an efficient way of harnessing the power generated and storing it efficiently for future use.
This is where the industry has come of age and now that storage issues have been largely resolved thanks to technological developments, the future looks very bright for renewables.
Shane Otwell writes articles which focus on the economy and investing. He has a wealth of experience stored up through his role in investment banking that he is ready to share with an online audience.