Solar and wind dominate investments in renewable energy. How much bigger will these technologies get under a global climate deal?
That was what MIT researchers tried to answer in a November report evaluating the cumulative impact of individual country plans to reduce greenhouse gas emissions submitted at the Paris climate summit.
If those targets are met, they could mean a tripling ofsolarand wind capacity in the next 15 years. That’s the upside.
There are also downsides that could limit growth. Greater penetration of intermittent renewables will require energy storage and grid modernization investments; countries worried about oversubsidization may pull back on their support mechanisms. These factors make projections hard to guarantee.
Still, the pledges alone were noteworthy.
“I think it’s pretty amazing that so many countries put their pledges down on paper. That’s a great step in the right direction,” said Jessika Trancik, assistant professor in energy studies at MIT and lead author of the report.
The report served two purposes: to lay out the favorable numbers for renewable electricity and to encourage sustained policy that drives private competition.
In Paris, nearly all of the 196 participating nations made Intended Nationally Determined Contributions (INDCs) to the United Nations to reduce greenhouse gases. Under the commitments, the researchers estimate that solar could supply 4 percent of global electricity and wind could supply 9 percent by 2030, up from only a few percent today for both technologies combined.
Moreover, the related cost reductions would be up to 50 percent for solar and up to 25 percent for wind.
The installed capacity of solar and wind has doubled every three years, on average, over the last 30 years. Over the last three decades, wind capacity costs have decreased by 75 percent. Since 1976, photovoltaic module costs have dropped by 99 percent, according to the report.
Those numbers can further improve, Trancik said. Producers gain experience. Technology manufacturing and installation methods are still evolving. These improvements will likely encourage governments to increase their targets. “It should allow countries to increase their commitments to cutting emissions over time,” said Trancik.
From 2000-2014, the cost of avoiding greenhouse gases in the U.S. by choosing solar over coal-fired electricity has dropped by 85 percent. Over the last 40 years, the cost has fallen by a factor of 50. “These cost declines were due to technology improvement, driven by government policies and private-sector innovation,” wrote the researchers.
The commitments are an important step, but the report also highlighted issues that require attention in order to ensure progress.
One, in particular, is the importance of energy storage. It’s increasingly needed to address solar and wind intermittency and to optimize the grid, Trancik said.
Another need is to increase knowledge sharing between countries -- and, with that sharing, to reduce soft costs across permitting, financing and installation. Hardware can be modular and exported, but soft costs can vary between regions. As the report noted, solar soft costs in Germany are roughly half those in Japan.
The other uncertainty comes from countries themselves. The Paris commitments are promises, not laws. Governments have a lot of room to change their commitments and their national support mechanisms -- and not always in the right direction.
For example, the United Kingdom announced sweeping cuts to renewable energy subsidies earlier this month. Trancik said that the move wasn’t unexpected. But it's proof that policy risk will still be an issue.
“We’ve seen quite a lot of volatility in the past in public policy,” she said. “Nonetheless, technologies have improved and markets have grown steadily at the global level. If policies can provide a consistent signal to the marketplace, that could help incentivize even faster innovation in low-carbon energy.”