Is Clean energy cheaper?
Updated: Feb 25, 2021
Fossil fuels versus renewable energy are one of the most important debates in the energy sphere. Which energy source, between that of fossil fuels and renewable energies cost the least economically, logistically, and environmentally? Is clean energy cheaper? This is exactly what we will try to answer.
Fossil fuels emit into the atmosphere large amounts of CO2 during their combustion, and they are, arguably, a significant cause of global warming, causing severe damage to the environment.
These emissions are so large that the International Renewable Energy Agency (IRENA) declared in 2019 that if today we decided to replace the costliest 500 gigawatts of electricity from the coal industry by solar and wind power, we would also reduce global CO2 emissions by 5%. This is explained by the fact that 80% of the energy production of the current world comes from fossil fuel (University of Arkansas, 2019), and according to The Intergovernmental Panel on Climate Change (IPCC), 89% of Global C02 emission came from fossil fuels (IPCC, 2018). It is important to note that among these fossil fuel energies, coal is the one that presents the most dangers for the environment; it is responsible for over 0.3C of the 1C increase in global average temperatures - making it the single largest source of global temperature rise (ClientEarth, 2020).
With these numbers in mind, we can affirm that fossil fuel energy has a high cost on the environment.
Here, unlike the environmental side, fossil fuels have slight domination over renewable energies. Indeed, clean energy requires more logistical efforts than fossil fuels. One of the major causes of these high-cost logistics is that certain renewable energies, like wind and solar farms, require a large amount of land to create relatively little energy. This is as opposed to fossil fuels, which work on combustion and require relatively little space to create quite a lot of energy, as well as waste, smog, and toxic runoff.
Another logistic challenge indirectly linked to the one mentioned above is that sites suitable for installation for renewable energies are generally far from city centers, which is the most expensive to connect to populations.
However, this challenge is being addressed as efforts at technological advancements in renewable energies are increasingly simplifying the logistics for renewable energies.
For years the "anti-renewable energy" argument was its expensive price compared to fossil fuels, but now the situation has changed.
Despite the logistical disadvantages, it will probably surprise you that renewable energies are now cheaper than fossil fuels on average, even if fossil fuels are still cheaper than renewable energy in some parts of the world. For years the "anti-renewable energy" argument was its expensive price compared to fossil fuels, but now the situation has changed. According to The 'Renewable Power Generation Costs in 2019' report, on average new solar photovoltaic and onshore wind farms cost less than keeping many existing coal plants in operation. Electricity costs for solar and wind power have continued to fall significantly between 2010 and 2019 - by 47% for concentrated solar power, 82% for solar PV, 39% for onshore wind, and 29% for offshore wind. According to the same report, if today we decided to replace the costliest 500 gigawatts of electricity from the coal industry by solar and wind power, it would save US$23 billion annually.
This progress is attributable to several factors such as technological innovations, economies of scale made possible by vast production chains, the development of better knowledge, and financing costs, which decrease at the same time as the confidence in these new sectors grow (Le Devoir, 2020), which should lead to further price reductions of 20% in 2021. Batteries, for example, which are essential to store electricity when there is no sun or wind, are getting better and cheaper at the same time making renewable energy cheaper. That is why, Michael Milken, founder of Milken Institute, an independent economic think tank, said in 2019: “Today, for two-thirds of the world, renewables are cheaper than a significant amount of carbon-based energy, so it isn't just an argument of environment, it's now just pure economics."
As you have noticed through the different comparisons above, we did not limit ourselves to price analysis only. We went beyond just that, the cost has also been measured from two other perspectives directly related to renewable energy and fossil fuels energy implementation. And the result is irrevocable, even if there is still some way to go, renewable energies have been able to considerably reduce their costs through technological advances, which has earned them this victory in this opposition to fossil fuels 2 vs 1 !