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| | + | == The Energy Transition-Economic Development Correlation<br/> == |
| | + | |
| | + | The histories of energy transitions, development of economies and industrial civilizations, all go hand in hand<ref name="Bridge, G. Bouzarovski, S. Bradshaw, M. & Eyre, N. (2013). Geographies of energy transition: space, place and the low-carbon economy. Energy Policy 53: 331-340. URL: http://www.sciencedirect.com/science/article/pii/S0301421512009512">Bridge, G. Bouzarovski, S. Bradshaw, M. & Eyre, N. (2013). Geographies of energy transition: space, place and the low-carbon economy. Energy Policy 53: 331-340. URL: http://www.sciencedirect.com/science/article/pii/S0301421512009512</ref><ref name="Timmons, D. Harris, J. M. & Roach, B. (2014). The Economics of Renewable Energy. Retrieved From: https://ase.tufts.edu/gdae/education_materials/modules/RenewableEnergyEcon.pdf">Timmons, D. Harris, J. M. & Roach, B. (2014). The Economics of Renewable Energy. Retrieved From: https://ase.tufts.edu/gdae/education_materials/modules/RenewableEnergyEcon.pdf</ref>. Going back in time, people only needed to cover their basic needs, such as food, which was met by practicing agriculture in the first formed human communities, essentially depending on the sun for such practices<ref name="Bridge, G. Bouzarovski, S. Bradshaw, M. & Eyre, N. (2013). Geographies of energy transition: space, place and the low-carbon economy. Energy Policy 53: 331-340. URL: http://www.sciencedirect.com/science/article/pii/S0301421512009512">Bridge, G. Bouzarovski, S. Bradshaw, M. & Eyre, N. (2013). Geographies of energy transition: space, place and the low-carbon economy. Energy Policy 53: 331-340. URL: http://www.sciencedirect.com/science/article/pii/S0301421512009512</ref><ref name="Timmons, D. Harris, J. M. & Roach, B. (2014). The Economics of Renewable Energy. Retrieved From: https://ase.tufts.edu/gdae/education_materials/modules/RenewableEnergyEcon.pdf">Timmons, D. Harris, J. M. & Roach, B. (2014). The Economics of Renewable Energy. Retrieved From: https://ase.tufts.edu/gdae/education_materials/modules/RenewableEnergyEcon.pdf</ref>. A step ahead, solar energy was used as a stored form in firewood and biomass (Mainly animal dung) energy to supply for cooking and heating human needs<ref name="Bridge, G. Bouzarovski, S. Bradshaw, M. & Eyre, N. (2013). Geographies of energy transition: space, place and the low-carbon economy. Energy Policy 53: 331-340. URL: http://www.sciencedirect.com/science/article/pii/S0301421512009512">Bridge, G. Bouzarovski, S. Bradshaw, M. & Eyre, N. (2013). Geographies of energy transition: space, place and the low-carbon economy. Energy Policy 53: 331-340. URL: http://www.sciencedirect.com/science/article/pii/S0301421512009512</ref><ref name="Timmons, D. Harris, J. M. & Roach, B. (2014). The Economics of Renewable Energy. Retrieved From: https://ase.tufts.edu/gdae/education_materials/modules/RenewableEnergyEcon.pdf">Timmons, D. Harris, J. M. & Roach, B. (2014). The Economics of Renewable Energy. Retrieved From: https://ase.tufts.edu/gdae/education_materials/modules/RenewableEnergyEcon.pdf</ref>. <br/> |
| | + | |
| | + | <br/> |
| | + | |
| | + | As economies evolved and developed a complex forms, with the human needs surpassing the basic ones, the energy needs consequently had to increase to meet such demand, hence dependence on firewood and biomass proved to be insufficient to meet that new rise in demands, so people started turning into hydropower, then to coal during the 19<sup>th</sup> century, oil and natural gas in the 20<sup>th</sup>, in addition to nuclear that was introduced in mid-20<sup>th</sup> century as well<ref name="Bridge, G. Bouzarovski, S. Bradshaw, M. & Eyre, N. (2013). Geographies of energy transition: space, place and the low-carbon economy. Energy Policy 53: 331-340. URL: http://www.sciencedirect.com/science/article/pii/S0301421512009512">Bridge, G. Bouzarovski, S. Bradshaw, M. & Eyre, N. (2013). Geographies of energy transition: space, place and the low-carbon economy. Energy Policy 53: 331-340. URL: http://www.sciencedirect.com/science/article/pii/S0301421512009512</ref><ref name="Timmons, D. Harris, J. M. & Roach, B. (2014). The Economics of Renewable Energy. Retrieved From: https://ase.tufts.edu/gdae/education_materials/modules/RenewableEnergyEcon.pdf">Timmons, D. Harris, J. M. & Roach, B. (2014). The Economics of Renewable Energy. Retrieved From: https://ase.tufts.edu/gdae/education_materials/modules/RenewableEnergyEcon.pdf</ref>.<br/> |
| | + | |
| | + | <br/> |
| | + | |
| | + | Therefore, it is apprehendable that each critical change in the economic system, or each economic development along history is always accompanied with a major energy transition, shifting from one major energy source to another<ref name="Bridge, G. Bouzarovski, S. Bradshaw, M. & Eyre, N. (2013). Geographies of energy transition: space, place and the low-carbon economy. Energy Policy 53: 331-340. URL: http://www.sciencedirect.com/science/article/pii/S0301421512009512">Bridge, G. Bouzarovski, S. Bradshaw, M. & Eyre, N. (2013). Geographies of energy transition: space, place and the low-carbon economy. Energy Policy 53: 331-340. URL: http://www.sciencedirect.com/science/article/pii/S0301421512009512</ref><ref name="Timmons, D. Harris, J. M. & Roach, B. (2014). The Economics of Renewable Energy. Retrieved From: https://ase.tufts.edu/gdae/education_materials/modules/RenewableEnergyEcon.pdf">Timmons, D. Harris, J. M. & Roach, B. (2014). The Economics of Renewable Energy. Retrieved From: https://ase.tufts.edu/gdae/education_materials/modules/RenewableEnergyEcon.pdf</ref>. Currently, while the major sources are fossil fuels (coal, oil and natural gas) are the dominant energy sources, the transition is already taking place from these resources into renewables (solar, wind, biomass... etc.)<ref name="Bridge, G. Bouzarovski, S. Bradshaw, M. & Eyre, N. (2013). Geographies of energy transition: space, place and the low-carbon economy. Energy Policy 53: 331-340. URL: http://www.sciencedirect.com/science/article/pii/S0301421512009512">Bridge, G. Bouzarovski, S. Bradshaw, M. & Eyre, N. (2013). Geographies of energy transition: space, place and the low-carbon economy. Energy Policy 53: 331-340. URL: http://www.sciencedirect.com/science/article/pii/S0301421512009512</ref><ref name="Timmons, D. Harris, J. M. & Roach, B. (2014). The Economics of Renewable Energy. Retrieved From: https://ase.tufts.edu/gdae/education_materials/modules/RenewableEnergyEcon.pdf">Timmons, D. Harris, J. M. & Roach, B. (2014). The Economics of Renewable Energy. Retrieved From: https://ase.tufts.edu/gdae/education_materials/modules/RenewableEnergyEcon.pdf</ref>. |
| | + | |
| | + | Though, the 21<sup>st</sup> century energy transition is going underway, not mainly because of change in human needs, but due to few main factors<ref name="Bridge, G. Bouzarovski, S. Bradshaw, M. & Eyre, N. (2013). Geographies of energy transition: space, place and the low-carbon economy. Energy Policy 53: 331-340. URL: http://www.sciencedirect.com/science/article/pii/S0301421512009512">Bridge, G. Bouzarovski, S. Bradshaw, M. & Eyre, N. (2013). Geographies of energy transition: space, place and the low-carbon economy. Energy Policy 53: 331-340. URL: http://www.sciencedirect.com/science/article/pii/S0301421512009512</ref><ref name="Timmons, D. Harris, J. M. & Roach, B. (2014). The Economics of Renewable Energy. Retrieved From: https://ase.tufts.edu/gdae/education_materials/modules/RenewableEnergyEcon.pdf">Timmons, D. Harris, J. M. & Roach, B. (2014). The Economics of Renewable Energy. Retrieved From: https://ase.tufts.edu/gdae/education_materials/modules/RenewableEnergyEcon.pdf</ref>: |
| | + | |
| | + | #Concerns about environmental impacts (Degradation, GHG, Climate Change… etc.) |
| | + | #The ongoing depletion of current energy sources, as they are limited and on the decline (Millions of years to form, decades or less to consume) |
| | + | #Prices and technological change |
| | + | |
| | + | <br/> |
| | + | |
| | + | Considering the added costs to mitigate, adapt or fight the environmental side effects of the usage of fossil fuels as main energy source, renewables might be the only option that people/societies/governments have to adapt, in order to reform the current economic system –at least in the energy sector- into a new one. |
| | + | |
| | + | <br/> |
| | + | |
| | + | == Challenges to Consider == |
| | + | |
| | + | Assuming that renewable energy sources will actually be able to take hold in the near future, then few questions need to be argued and discussed beforehand: What renewable energy sources are available? How optimization of renewable energy mix will be determined? How will optimum mixtures of renewable-energy sources differ based on location? How to determine and calculate the direct and external costs of renewable energy sources? How will the existed achievements of renewable-energy sector affect the way energy is processes in current economy? What kind of changes in sectors of engineering, economy and policy would be needed to adapt to renewable energy sources?<ref name="Timmons, D. Harris, J. M. & Roach, B. (2014). The Economics of Renewable Energy. Retrieved From: https://ase.tufts.edu/gdae/education_materials/modules/RenewableEnergyEcon.pdf">Timmons, D. Harris, J. M. & Roach, B. (2014). The Economics of Renewable Energy. Retrieved From: https://ase.tufts.edu/gdae/education_materials/modules/RenewableEnergyEcon.pdf</ref><br/> |
| | + | |
| | + | <br/> |
| | + | |
| | + | Economically, futuristic projections of energy sources’ prices and their technologies is vital for forecasting the economic options of the energy supply, also with few critical questions in mind: Should the choice of a technology based on its current market price or because of its potential future cost reductions? Which technologies offer the most effective outcomes for specific applications? If the current technology is too expensive, should governmental subsidies help to achieve cost reduction for economic viability or is it better to wait for market forces –Smith’s invisible hands- to do the job?<ref name="REN21. (2017). Renewables Global Futures Report: Great Debates towards 100% Renewable Energy. Retrieved From: http://www.ren21.net/wp-content/uploads/2017/10/GFR-Full-Report-2017_webversion_3.pdf">REN21. (2017). Renewables Global Futures Report: Great Debates towards 100% Renewable Energy. Retrieved From: http://www.ren21.net/wp-content/uploads/2017/10/GFR-Full-Report-2017_webversion_3.pdf</ref><br/> |
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| | = Rationale for <span data-scayt_word="renewables" data-scaytid="4">Renewables</span><br/> = | | = Rationale for <span data-scayt_word="renewables" data-scaytid="4">Renewables</span><br/> = |
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| | = <span style="font-size: 19px; line-height: 23px">Costs of Renewable Energy</span> = | | = <span style="font-size: 19px; line-height: 23px">Costs of Renewable Energy</span> = |
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| | These factors suggest that there is scope to reduce the varying production costs of <span data-scayt_word="renewables" data-scaytid="22">renewables</span>.<span style="font-size: 0.85em; line-height: 1.5em"></span> | | These factors suggest that there is scope to reduce the varying production costs of <span data-scayt_word="renewables" data-scaytid="22">renewables</span>.<span style="font-size: 0.85em; line-height: 1.5em"></span> |
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| | *The most expensive form of renewable energy is [[Portal:Hydro|ocean/tidal electricity]], which, even at the bottom of the potential cost range, remains uncompetitive with fossil fuels. | | *The most expensive form of renewable energy is [[Portal:Hydro|ocean/tidal electricity]], which, even at the bottom of the potential cost range, remains uncompetitive with fossil fuels. |
| | **Onshore and offshore wind and large solar photovoltaic (PV) plants today require policy support in order to bridge the gap between generation costs and the market prices of electricity. This is expected to change in the near future as [http://iea-retd.org/wp-content/uploads/2013/07/20130710-RE-COST-FINAL-REPORT.pdf reported] by the [http://iea-retd.org/ International Energy Agency's Renewable Energy Technology Deployment Group] (<span data-scayt_word="IEA" data-scaytid="24">IEA</span>). The report finds that technology and market dynamics are driving down the costs of renewable power generation while increasing the costs involved in non-renewable generation. Thus in the near future, onshore wind and large scale PV plants could be able to offer attractive business cases to investors in regions with a high proportion of thermal generation without resorting to incentives <ref name="Bayar, T., 2013. The Cost of New Renewable Power Generation: Approaching Parity? Available at: http://www.renewableenergyworld.com/rea/news/article/2013/07/costing-renewable-power-generation?cmpid=rss">Bayar, T., 2013. The Cost of New Renewable Power Generation: Approaching Parity? Available at: http://www.renewableenergyworld.com/rea/news/article/2013/07/costing-renewable-power-generation?cmpid=rss</ref>. | | **Onshore and offshore wind and large solar photovoltaic (PV) plants today require policy support in order to bridge the gap between generation costs and the market prices of electricity. This is expected to change in the near future as [http://iea-retd.org/wp-content/uploads/2013/07/20130710-RE-COST-FINAL-REPORT.pdf reported] by the [http://iea-retd.org/ International Energy Agency's Renewable Energy Technology Deployment Group] (<span data-scayt_word="IEA" data-scaytid="24">IEA</span>). The report finds that technology and market dynamics are driving down the costs of renewable power generation while increasing the costs involved in non-renewable generation. Thus in the near future, onshore wind and large scale PV plants could be able to offer attractive business cases to investors in regions with a high proportion of thermal generation without resorting to incentives <ref name="Bayar, T., 2013. The Cost of New Renewable Power Generation: Approaching Parity? Available at: http://www.renewableenergyworld.com/rea/news/article/2013/07/costing-renewable-power-generation?cmpid=rss">Bayar, T., 2013. The Cost of New Renewable Power Generation: Approaching Parity? Available at: http://www.renewableenergyworld.com/rea/news/article/2013/07/costing-renewable-power-generation?cmpid=rss</ref>. |
| | + | |
| | *The next is [[Portal:Solar|solar power]], which at its cheapest is potentially competitive with fossil fuels. However, its midrange costs are well above fossil fuels. This wide range reflects the cost implications of different technologies. For example, large-scale '''Concentrated Solar Power (<span data-scayt_word="CSP" data-scaytid="25">CSP</span>)''' techniques employed in a desert environment could produce electricity at a far lower cost than small solar panels fitted to residential properties.<br/> | | *The next is [[Portal:Solar|solar power]], which at its cheapest is potentially competitive with fossil fuels. However, its midrange costs are well above fossil fuels. This wide range reflects the cost implications of different technologies. For example, large-scale '''Concentrated Solar Power (<span data-scayt_word="CSP" data-scaytid="25">CSP</span>)''' techniques employed in a desert environment could produce electricity at a far lower cost than small solar panels fitted to residential properties.<br/> |
| | *[[Portal:Wind|Wind power]] can be cheaper, but remains more expensive than fossil fuels in most instances. This range reflects differing scales of energy generation, but also the different cost structures of onshore and offshore wind.<br/> | | *[[Portal:Wind|Wind power]] can be cheaper, but remains more expensive than fossil fuels in most instances. This range reflects differing scales of energy generation, but also the different cost structures of onshore and offshore wind.<br/> |
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| | '''1. Fossil-fuel energy does not reflect its full social costs. '''<br/> | | '''1. Fossil-fuel energy does not reflect its full social costs. '''<br/> |
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| | *Climate change has been described as the "biggest market failure in history" (Stern Review, 2006) because the environmental costs associated with carbon emissions are not included in market prices.<br/> | | *Climate change has been described as the "biggest market failure in history" (Stern Review, 2006) because the environmental costs associated with carbon emissions are not included in market prices.<br/> |
| | *Furthermore, fossil fuels are [[Subsidies|subsidized]] for about US$300 billion per year. Removing theses subsidies and incorporating externalities into fossil fuel costs would dramatically change relative costs<ref name="Griffith-Jones, S., Ocampo, J. A. & Spratt, S., 2011. Financing Renewable Energy in Developing Countries: Mechanisms and Responsibilities. Available at: http://erd-report.eu/erd/report_2011/documents/dev-11-001-11researchpapers_griffith-jones-ocampo-spratt.pdf">Griffith-Jones, S., Ocampo, J. A. & Spratt, S., 2011. Financing Renewable Energy in Developing Countries: Mechanisms and Responsibilities. Available at: http://erd-report.eu/erd/report_2011/documents/dev-11-001-11researchpapers_griffith-jones-ocampo-spratt.pdf</ref>. | | *Furthermore, fossil fuels are [[Subsidies|subsidized]] for about US$300 billion per year. Removing theses subsidies and incorporating externalities into fossil fuel costs would dramatically change relative costs<ref name="Griffith-Jones, S., Ocampo, J. A. & Spratt, S., 2011. Financing Renewable Energy in Developing Countries: Mechanisms and Responsibilities. Available at: http://erd-report.eu/erd/report_2011/documents/dev-11-001-11researchpapers_griffith-jones-ocampo-spratt.pdf">Griffith-Jones, S., Ocampo, J. A. & Spratt, S., 2011. Financing Renewable Energy in Developing Countries: Mechanisms and Responsibilities. Available at: http://erd-report.eu/erd/report_2011/documents/dev-11-001-11researchpapers_griffith-jones-ocampo-spratt.pdf</ref>. |
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| | '''2. It is more expensive to deliver non-renewable energy in some places than others.'''<br/> | | '''2. It is more expensive to deliver non-renewable energy in some places than others.'''<br/> |
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| | *For example, rural communities in developing countries are often not connected to the [[Portal:Grid|grid]], resulting in "off-grid" energy production - particularly solar power - being more competitive<ref name="Griffith-Jones, S., Ocampo, J. A. & Spratt, S., 2011. Financing Renewable Energy in Developing Countries: Mechanisms and Responsibilities. Available at: http://erd-report.eu/erd/report_2011/documents/dev-11-001-11researchpapers_griffith-jones-ocampo-spratt.pdf">Griffith-Jones, S., Ocampo, J. A. & Spratt, S., 2011. Financing Renewable Energy in Developing Countries: Mechanisms and Responsibilities. Available at: http://erd-report.eu/erd/report_2011/documents/dev-11-001-11researchpapers_griffith-jones-ocampo-spratt.pdf</ref>. | | *For example, rural communities in developing countries are often not connected to the [[Portal:Grid|grid]], resulting in "off-grid" energy production - particularly solar power - being more competitive<ref name="Griffith-Jones, S., Ocampo, J. A. & Spratt, S., 2011. Financing Renewable Energy in Developing Countries: Mechanisms and Responsibilities. Available at: http://erd-report.eu/erd/report_2011/documents/dev-11-001-11researchpapers_griffith-jones-ocampo-spratt.pdf">Griffith-Jones, S., Ocampo, J. A. & Spratt, S., 2011. Financing Renewable Energy in Developing Countries: Mechanisms and Responsibilities. Available at: http://erd-report.eu/erd/report_2011/documents/dev-11-001-11researchpapers_griffith-jones-ocampo-spratt.pdf</ref>. |
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| | '''3. Fossil Fuels are fast depleting and more scarce than RE '''(See figure below).<br/> | | '''3. Fossil Fuels are fast depleting and more scarce than RE '''(See figure below).<br/> |
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| | *In terms of primary energy, it is already technically possible to generate many multiples of global energy supply using solar energy. There is also an abundant supply of wind or geothermal power to meet all of today’s global electricity demand<ref name="Griffith-Jones, S., Ocampo, J. A. & Spratt, S., 2011. Financing Renewable Energy in Developing Countries: Mechanisms and Responsibilities. Available at: http://erd-report.eu/erd/report_2011/documents/dev-11-001-11researchpapers_griffith-jones-ocampo-spratt.pdf">Griffith-Jones, S., Ocampo, J. A. & Spratt, S., 2011. Financing Renewable Energy in Developing Countries: Mechanisms and Responsibilities. Available at: http://erd-report.eu/erd/report_2011/documents/dev-11-001-11researchpapers_griffith-jones-ocampo-spratt.pdf</ref>.<br/> | | *In terms of primary energy, it is already technically possible to generate many multiples of global energy supply using solar energy. There is also an abundant supply of wind or geothermal power to meet all of today’s global electricity demand<ref name="Griffith-Jones, S., Ocampo, J. A. & Spratt, S., 2011. Financing Renewable Energy in Developing Countries: Mechanisms and Responsibilities. Available at: http://erd-report.eu/erd/report_2011/documents/dev-11-001-11researchpapers_griffith-jones-ocampo-spratt.pdf">Griffith-Jones, S., Ocampo, J. A. & Spratt, S., 2011. Financing Renewable Energy in Developing Countries: Mechanisms and Responsibilities. Available at: http://erd-report.eu/erd/report_2011/documents/dev-11-001-11researchpapers_griffith-jones-ocampo-spratt.pdf</ref>.<br/> |
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| | = <span style="line-height: 30px; font-size: 22px;">Increasing the Use of Renewable Energy</span><br/> = | | = <span style="line-height: 30px; font-size: 22px;">Increasing the Use of Renewable Energy</span><br/> = |
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| | = Further Information = | | = Further Information = |
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| | <references /> | | <references /> |
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| − | [[Category:Financing_and_Funding]]
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| − | [[Category:Solar]]
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| − | [[Category:Hydro]]
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| − | [[Category:Geothermal]]
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| − | [[Category:Bioenergy]]
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| − | [[Category:Wind]]
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| | [[Category:Biomass]] | | [[Category:Biomass]] |
| | + | [[Category:Wind]] |
| | + | [[Category:Bioenergy]] |
| | + | [[Category:Geothermal]] |
| | + | [[Category:Hydro]] |
| | + | [[Category:Solar]] |
| | + | [[Category:Financing_and_Funding]] |
The histories of energy transitions, development of economies and industrial civilizations, all go hand in hand[1][2]. Going back in time, people only needed to cover their basic needs, such as food, which was met by practicing agriculture in the first formed human communities, essentially depending on the sun for such practices[1][2]. A step ahead, solar energy was used as a stored form in firewood and biomass (Mainly animal dung) energy to supply for cooking and heating human needs[1][2].
As economies evolved and developed a complex forms, with the human needs surpassing the basic ones, the energy needs consequently had to increase to meet such demand, hence dependence on firewood and biomass proved to be insufficient to meet that new rise in demands, so people started turning into hydropower, then to coal during the 19th century, oil and natural gas in the 20th, in addition to nuclear that was introduced in mid-20th century as well[1][2].
Therefore, it is apprehendable that each critical change in the economic system, or each economic development along history is always accompanied with a major energy transition, shifting from one major energy source to another[1][2]. Currently, while the major sources are fossil fuels (coal, oil and natural gas) are the dominant energy sources, the transition is already taking place from these resources into renewables (solar, wind, biomass... etc.)[1][2].
Considering the added costs to mitigate, adapt or fight the environmental side effects of the usage of fossil fuels as main energy source, renewables might be the only option that people/societies/governments have to adapt, in order to reform the current economic system –at least in the energy sector- into a new one.
Assuming that renewable energy sources will actually be able to take hold in the near future, then few questions need to be argued and discussed beforehand: What renewable energy sources are available? How optimization of renewable energy mix will be determined? How will optimum mixtures of renewable-energy sources differ based on location? How to determine and calculate the direct and external costs of renewable energy sources? How will the existed achievements of renewable-energy sector affect the way energy is processes in current economy? What kind of changes in sectors of engineering, economy and policy would be needed to adapt to renewable energy sources?[2]
Economically, futuristic projections of energy sources’ prices and their technologies is vital for forecasting the economic options of the energy supply, also with few critical questions in mind: Should the choice of a technology based on its current market price or because of its potential future cost reductions? Which technologies offer the most effective outcomes for specific applications? If the current technology is too expensive, should governmental subsidies help to achieve cost reduction for economic viability or is it better to wait for market forces –Smith’s invisible hands- to do the job?[3]
Worldwide more energy is required to enable economic development. Fossil fuels are a finite resource that contribute to climate change and cause other problems like smog, extended supply lines and vulnerable power grids. Utilizing renewables would help to avoid these problems, create new job opportunities and reduce the drain on hard currency for poorer countries. Because conventional fuels have received long-term subsidies in the past, it is vital that governments support the development of renewables in the form of financial incentives that can create a level playing field [4].
In 2011, the global investment in renewable power and fuels increased by 17% to a new record of $257 billion dollars. Significantly, developing economies made up 35% of this total investment [6].
Generally the economics of renewable energy are not competitive, as production costs per unit of energy are usually higher than those for fossil fuels as depicted in the figure below, which shows the relative costs for renewable energy technologies compared with each other, and with non-renewable energy[7].
As shown in the figure, while non-renewable costs are found in the range of US$0.3–US$0.10/KwH (kilowatt hour), most renewables are more expensive and have a far greater cost range. This indicates the relative maturity of technologies and also the key significant cost difference of renewable energy production (which is dependent on factors such as wind speed and degrees of solar intensity.)
These factors suggest that there is scope to reduce the varying production costs of renewables.
On the other hand, the cost of gas and coal fired plants is increasing because they are being used less, largely due to policy support for renewables construction delays, higher financing rates, and the increasing cost of fuel in some European countries and in Japan.
Crucially, the higher capital costs involved in some new-build thermal plants due to emission reduction systems will be positively or negatively influenced by the shape and provisions of future policies for emission control[8].
Significantly, much of the global solar power potential is concentrated in developing countries, although other areas also have a high potential.
