Decarbonizing Grids Will Save Trillions, Study Finds
Far from costing more, investments in grid renewables should provide considerable savings for utilities globally, according to a new analysis published in the journal Joule.
“A rapid green energy transition will likely result in trillions of net savings,” according to the researchers, who add that “most energy-economy models have produced energy-transition scenarios that overestimate costs due to underestimating renewable-energy cost improvements and deployment rates.”
The authors modeled forecasts for solar energy, wind energy, batteries, and electrolyzers. They say that fossil fuel prices, though they fluctuate dramatically in the short term, have remained virtually the same after 140 years when adjusted for inflation, showing “no obvious long-range trend.” In contrast, they note, renewables have “dropped (roughly) exponentially at a rate near 10% per year” since 1958 while also exponentially rising in deployment levels, a pattern seen in no other power-generation technology. Typical predictive models, which are “highly influential,” they say, do not take these price drops and deployment rates into account and have historically projected higher-than-actual costs for green technology.
Recognizing that price drops are not guaranteed to continue, though, the study goes on to forecast costs and deployment rates under three different scenarios:
- “Fast transition”—fossil fuel elimination by 2050
- “Slow transition”—fossil fuel elimination by 2070
- “No transition”—continued dominance of fossil fuels
Taking into account the savings from not needing to purchase fossil fuels, the Fast Transition scenario would cost about $514 billion less than the No Transition scenario, the analysts claim (while also noting that the Fast Transition scenario has more uncertainty associated with it). The Slow Transition is more expensive than the Fast Transition because “the current high spending on fossil fuels continues for decades, and the savings from key green technologies are only realized much later,” but it is still less expensive than the No Transition scenario. The analysis does not take into account any policies that might, for example, put a price on greenhouse gas emissions.
The researchers point out that a rapid transition is plausible in the real world, assuming the current rate of asset replacement over time and the availability of natural resources and land to support the transition. They note, however, that even so, “achieving this is likely to require strong international policies for building infrastructure, skills training, and making the investments required to realize future gains.”
The widely accepted idea that transitioning away from fossil fuels will cost more than continuing to use fossil fuels has dangerously slowed progress, the researchers claim, but “our results indicate that a rapid green energy transition is likely to be beneficial, even if climate change were not a problem.”
For more information:
Melton, P. (2022, September 21). Decarbonizing Grids Will Save Trillions, Study Finds. Retrieved from https://www.buildinggreen.com/newsbrief/decarbonizing-grids-will-save-trillions-study-finds