Moore's law may be dead, but Swanson's law remains alive and well.
Swanson's law is the observation that PV panels tend to be 20 percent cheaper for each doubling of cumulatively transmitted volume. It is the solar industry's equivalent to Moore's law, which predicts the increasing computing power of processors. But as the semiconductor industry has discovered, the observation that the processing power increases exponentially over two years or so, cadence has hit a physical limit.
Fortunately, Swanson's law has not yet come up against such a brick wall and solar energy costs have continued to come down at the bottom for decades ̵[ads1]1; without exception. And now, the renewable energy industry is in the process of crossing a major milestone that will really set it on its way to becoming the world's leading energy source.
According to a report by Reuters, the International Renewable Energy Agency (IRENA), which begins in 2020, electricity generated by solar cells and land winds on wind will be consistently cheaper than the most cost-effective alternative to fossil fuels, without subsidies.
Essentially, more than 80 percent of solar cells and 75 percent of land-based wind power deployments are due next year, being cheaper than the cheapest new oil, natural gas, or coal fired sources according to the report. Related: Norwegian oil port lights up to expenses for receiving decline
This report has a fairly wide scope, which has been collected by IRENA's own members, governments, consulting companies, industrial groups, business magazines, auctions , and tenders. IRENA's membership includes research institutes, project developers, tools and power companies over 160 countries, all of which contribute to data for their renewable cost database.
Swanson's Law in Action
According to the IRENA report, the global weighted average energy cost of solar energy fell another 26 percent last year compared to the previous year. Bioenergy costs decreased by 14 per cent, solar energy PV and rural areas fell 13 per cent, hydropower was 12 per cent lower, while offshore wind was 1 per cent cheaper last year. Costs as low as $ 0.03 – $ 0.04 per kilowatt hour (kWh) for solar PV and land-based wind have already become a reality in some parts of the globe.
IRENA estimates that the global average cost of solar panel electricity will clock in at $ 0.055 / kWh by 2020, then fall another 13 percent to $ 0.048 / kWh in 2021. For wind on land, similar estimates are $ 0.049 / kWh and $ 0.045 / kWh in 2020 and 2021.
Road to 100% Renewable Energy
By the turn of the century, the idea that renewable energy could become a major energy source during our lives could have left incredible , even despised. After all, fossil fuels were only for dominant and much cheaper, while renewable energy apparently faced insurmountable technical, cost and integration challenges.
Nevertheless, the impossible could happen.
Over the last decade, renewable energy has experienced transformative changes so that it can play a very important role in our energy industry. The solar energy industry has particularly been a prominent player thanks to remarkable price falls with solar cells and increased flexibility in the network.
According to data from the Solar Energy Industries Association (SEIA), the US cumulative operating solar cell capacity of 62.4 GW by the end of 2018 – about 75 times the installed capacity just ten years ago – delivers 1 percent of the country's electricity demand. Related: The Second Machine Age Can Crash Oil Prices
The future of renewable energy looks lighter than ever. The energy company BP has estimated that solar heating and other renewable energy sources will supply 30 per cent of the world's electricity needs by 2040 and up to 50 per cent in regions such as Europe. There is an upgrade from the company's previous forecast of 25 percent by 2040.
BP estimates that renewable energy only takes 25 years to go from 1 percent to 10 percent of global energy compared to 45 years for oil and more than 50 years for gas . The funny thing is that the growth of sun has been consistently underestimated over the past decade, with actual installations exceeding projections. That means there is a good chance that even the most optimistic current projections will still be out of reality a decade or two from now.
The consequences for the world economy are bound to be huge. Beyond the potential for stopping climate change in the tracks, renewable energy is likely to negate at least some of the nearly $ 300 billion in annual energy subsidies from world governments.
By Alex Kimani for Oilprice.com
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