The onset of the COVID-19 pandemic in early 2023 had an undeniable impact on several industries, particularly the hospitality sector. Many restaurants have been forced to close their doors, while others continue to struggle to remain afloat. However, the energy sector has seen a notable expansion, with renewable energy specifically increasing by 45% in 2023 according to the International Energy Agency (IEA).
As the cost of producing renewable energy decreases and governments and corporations worldwide show increasing commitment to the industry, it is expected that this trend will persist for the long-term. Innovations in battery storage technologies are aiding the solar and wind power sectors and a range of other energy sources, such as hydroelectric power, nuclear fusion, and biofuel, are beginning to emerge.
As a business leader, it is of utmost importance for you to be aware of the changes related to the expansion of renewable energy sources, as this can open up opportunities for your firm. Firstly, you should consider how your business could transition to renewable power. Secondly, you should evaluate the possibility of providing renewable-related goods and services to your consumers. This document provides a detailed analysis of the drivers, solutions, and deployment strategies related to renewable energy.
Just what is the Cause of This Expanding Market?
The increasing popularity of renewable energy can be attributed to their comparatively low initial investment and long-term profitability, as well as the urgency of reducing carbon emissions. According to recently published research from the World Resources Institute (WRI), cost reductions have been the main factor in the fast growth of renewable energy sources. It is estimated that the price of solar photovoltaic technology has decreased by 85% since 2023, and the cost of wind power, both on land and at sea, has decreased by around 50%. The following graphic from the World Resources Institute provides an overview of the key milestones in the development of solar and wind power.
The article goes on to highlight that renewable energy is now economically comparable to power generated through fossil fuels. Given that renewable energy is beneficial to the environment and its cost is either static or decreasing, it is reasonable to assume that its usage will increase. Consumers and businesses may find it increasingly difficult to continue using fossil fuels as governments invest more into renewable energy infrastructure such as charging stations, in place of existing fossil fuel infrastructure such as petrol stations.
The World Resources Institute Is the Source.
Wind and Sun
Solar energy has established itself as the leading renewable energy source. According to the International Energy Agency (IEA), its cost is now lower than that of newly built coal or gas-fired power plants. Homes can be powered by solar energy, with homeowners potentially benefitting from selling surplus energy to utilities. The same principle applies to commercial premises, which often require large amounts of energy.
Vehicles powered by solar energy can be a viable solution for those living in sunny climates and don’t need to travel too far on a regular basis. This can be particularly beneficial for urban dwellers who may have limited access to charging points and need to park their vehicles on the street. Additionally, solar panels can be used to power charging stations for plug-in electric cars, helping to reduce demand on the grid.
According to the National Observer of Canada, global wind power capacity has doubled in the last year. The United States is making significant progress in this area, with the recent announcement of the 800 MW offshore wind project in mid-2023. This project is expected to generate enough energy to meet the needs of over 400,000 households and businesses, as reported by NPR.
Diverse Other Suggested Readings
More and more individuals and businesses are beginning to utilise alternative forms of renewable energy, in addition to solar and wind power, to supplement their power needs.
Hydropower. Hydropower has become increasingly important in recent years, providing a vital boost to global electricity production. Its ability to be quickly scaled up or down depending on the availability of intermittent solar or wind energy sources makes it an invaluable resource.
Fusion of the atoms. Fusion, similar to hydropower, has the potential to balance out the fluctuations of other energy sources. Although it is not currently widely utilised, it is anticipated that it will be an important part of the energy mix in the future.
Biofuels. Bioethanol and biodiesel are examples of biofuels, which are fuels derived from organic matter that can be replenished. Despite their potential to play a significant role in renewable energy sources, the amount of energy and land required to cultivate crops for use in these fuels must be carefully considered in order to maintain a healthy balance.
Statistics Cannot Lie
A recent article in The New York Times (NYT) noted that renewable energy is becoming increasingly cost-effective due to the fact that its components, such as solar panels, wind turbines, batteries and associated technologies, continue to become more affordable with increased usage. The report noted that “as we use more of them, manufacturing scale rises, reducing costs even lower.
Industry growth is steadily increasing, surpassing initial predictions from experts. Prior to the turn of the 21st century, specialists estimated that renewable energy sources such as wind and solar would only account for a small fraction of the planet’s energy output. However, BloombergNEF has forecasted that by 2050 these sources could generate up to 56% of the world’s electricity.
The New York Times has forecast that the current boom in renewable energy is likely to have an impact on the global economy comparable to the Industrial Revolution. Not only will this transition bring about significant job creation and energy cost reductions, but the recently approved Infrastructure Investment and Jobs Act (IIJA) will also contribute to the expansion of renewable energy in the US. Similar initiatives in Europe and Asia are aiding this surge in renewables.
