Across the globe, the spending on renewable energy is more than twice as much as the investment in electricity from coal, natural gas and nuclear power plants. This is driven by the falling costs of production of solar and wind power.
According to the International Energy Agency, in recent years, over half of the power generating capacity added in the world has been in renewable sources, like solar and wind.
There has been a noted, considerable rise in investment in renewables. The Wall Street Journal notes:
In 2016, the latest year for which data is available, about $297 billion was spent on renewables—more than twice the $143 billion spent on new nuclear, coal, gas and fuel oil power plants, according to the IEA. The Paris-based organization projects renewables will make up 56% of net generating capacity added through 2025.
The costs of solar- and wind-generation have fallen consistently for over a decade now, supported by the government incentives such as cash-back and tax credits. This has made investment in renewables far more competitive.
In fact, in the past few years, the cost of renewables have fallen so far that according to Francis O’Sullivan, research director of the Massachusetts Institute of Technology’s Energy Initiative, “wind and solar now represent the lowest-cost option for generating electricity.”
A Bigger Piece of the Pie
Earlier this month, Xcel Energy Inc. announced a $2.5 billion plan to add 1,800 megawatts of new solar and wind generation, along with a substantial amount of batteries to store the power. The plan needs approval by state regulators and would shut down 660 megawatts of coal-burning generation. It will also result in savings for consumers, the Minneapolis-based utility said.
“I think, across the nation, you could get to 40% renewable energy,” said Xcel Chief Executive Ben Fowke. “Ten years ago, I would have told you 20% was the max.”
According to the International Renewable Energy Agency, the prices of renewable-energy are now competitive with fossil-fuel generation in many places. In 2017, the global average cost of electricity from solar was $100 per megawatt and $60 for onshore wind. Meanwhile, for new fossil-fuel facilities, it was toward the lower end of the $50 to $170 range in developed nations.
The combination of falling costs and the availability of large pools of capital is also spurring renewables growth in developing countries.