For the past eight months, Worldwatch has been working in partnership with the International Renewable Energy Agency (IRENA) to begin developing a set of renewable energy indicators to measure and assess progress toward meeting renewable energy goals. This exciting and challenging project has allowed us to dive deeper into an examination of the real-world conditions shaping the evolution of the renewables sector today.
As the first phase of this unique venture draws to a close, Worldwatch has identified three key areas where measurements could have a profound impact toward transforming the global energy sector:
- Barriers to renewable energy development and deployment;
- Enablers to scale up renewables development and deployment; and
- The positive impacts of renewable energy deployment on broader national priorities and development goals
Certain renewable energy technologies, such as wind and solar, have matured to the point where they are now at grid-parity with traditional fossil fuel generation sources, with even more set to approach this point in the coming years. At the same time, many technical restrictions are quickly becoming a thing of the past. Yet despite all these positive developments, the renewables sector still has not witnessed the robust growth needed to reach the full potential of these technologies.
Renewables, of course, have a tremendous technical potential to supply large amounts of power to the world. The National Renewable Energy Laboratory estimates that, in the United States alone, the technical potential of solar photovoltaics (PV) and concentrating solar power (CSP) is 200,000 gigawatts, or enough to generate nearly 400,000 terawatt hours of energy each year. As of year-end 2011, however, only 507 megawatts of CSP and 4 gigawatts of solar PV were installed in the United States.
Barriers to renewable energy deployment
A number of non-technical barriers to renewable energy seem to be challenging policymakers, project developers, and anyone else looking to scale-up the development and deployment of renewables. These must be addressed if the gap between renewables’ potential and today’s capacity is to be closed. Throughout this project, Worldwatch has identified and categorized a wide range of barriers that must be addressed for the sector to flourish.
Cost and finance issues continue to severely constrain growth. To many, renewables are seen as prohibitively expensive based on their overall cost per unit of energy produced. Yet energy prices worldwide fail to account for the heavy cost to societies incurred by generation from dirty fuel sources, making these technologies artificially cheaper. If these real societal costs, such as environmental degradation, reduction of crop yields, and adverse health effects, were taken into account, this would add an estimated 17.84 U.S. cents per kilowatt hour (kWh) to ‘cheap’ coal-generated power.
Coal, of course, is not the only fuel source to have a severely detrimental impact on societies. Accounting for the true cost of energy generation in energy pricing would greatly increase the cost competitiveness of renewables and highlight the impact that energy generation has on our societies. In addition, financial barriers such as the cost of and access to capital can also increase the expense and difficulty of developing renewable energy projects.
These cost and finance issues are far from the only challenges that stakeholders face today. Policy and regulatory barriers—including perverse policy incentives such as the estimated $775 billion in global fossil fuel subsidies— entrenched interests, and knowledge barriers all represent significant constraints on the sector. The impact of these non-technical barriers is often very difficult to assess and is not fully understood in many cases.