Renewables are not yet the least costly option in every market, writes Tim Buckley, Director of Energy Finance Studies Australasia at the Institute for Energy Economics and Financial Analysis (IEEFA), but the pace of change demonstrates that a tipping point toward a new energy economy is coming, and fast. A growing number of governments have decided to diverge from the legacy fossil fuel power generation, and this rampant, deflationary trend around renewables will give economic credence to this decision. New investment decisions favor renewables because of their commercial merit, their lower externalities, the diversity of supply they bring to the grid, and as a way to avoid stranded asset risks of the sort that plagues thermal power plants which, once built, generally have a 40-50-year lifespan. Leadership in this trend is becoming more geographically widespread, with India, Mexico, Chile, Argentina, Australia, Canada and the UAE joining the more traditional global frontrunners of China, America, Germany, Denmark and the U.K. For countries still considering future electricity generation needs, rapidly deployed renewables increasingly offer the best option in terms of cost. Even in mature economies, replacing fossil fuel imports with renewables is increasingly the answer, with Taiwan, South Korea and others countries like them having started the shift in 2017. Renewables are not yet the least costly option in every market, but the pace of change demonstrates that a tipping point toward a new energy economy coming, and fast.
Energy Post 14th Feb 2018 read more »