Renewable Energy is booming – it’s role in our economic recovery

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Renewables are reaching a tipping point, where they are now not just competitive with fossil fuels in terms of energy output but also cost.

The renewable energy industry is on the come up and the ceiling seems limitless. Not just that the planet has to reduce its carbon footprint, renewables are a cost-effective way for households, companies and even governments to run operations without coughing up a lot of money. 

Solar energy is now regarded as “the cheapest electricity in history” by the International Energy Agency. The IEA admitted that solar is up to 50% cheaper than their estimations from two years ago. What this means is that it is the time to adopt solar for your energy needs, saving money while also being environmentally friendly.

Experts predict that the cost of wind energy is far exceeding expectations and will become a more affordable source of power in a shorter period. While still not as viable as solar, it is predicted to be 50% cheaper by 2050, wind power being high in abundance. More and more hydropower projects are being approved worldwide, and the technology in this space will continuously improve and become more and more affordable. 

The cost of electricity from wind and solar PV is increasingly cheaper than new and even existing fossil fuel plants. In most countries, renewables are the most inexpensive way of meeting growing demand for energy.

However, this all remains theoretical and we might just be in the calm of the storm. COVID-19 has ravaged the globe for over a year now, and government investments seem to be drying up, where even renewable energy is not immune from its impacts.

Even the Renewable Industry is not impervious to an economic downturn

Exact figures on how extensive and severe these hits to economic growth globally are difficult to pinpoint, but there is no question that we have yet to experience the wrose. The global pandemic has caused disruptions in the supply chain, inflation, domestic political conflicts and high national debt levels continue to soar. 

Private sector-led investments make up 23% of all renewable energy projects in the midst of development, to be constructed between now and 2025. Further delays in procurement of components puts the squeeze on project deadlines though it’s impact is minimal compared to government investment.

Though 31% of renewable projects are already contracted, and vast majority likely to proceed, the main issue is how the many further projects will still be funded beyond 2025. Against economic uncertainty, the chances of pending energy projects being approved may fall.

Over three-quarters of all major renewable energy projects rely on government funding and support, the energy sector faces momentous challenges ahead following economic recovery from COVID-19.

Worldwide we have already see fallouts for example, Brazil, Chile, China, France, Germany and Portugal have all implemented recent policy changes to delay or postpone renewable energy tenders.

In Australia, our government, to date, has refused to provide a definite deadline on when we will achieve carbon net-zero. Not all hope is lost.

Government investments crucial for our economic recovery 

In Australia, there are three renewable energy strategies being deployed which could pull the way for economic recovery. 

There are plans to export our solar power to Asian nations that simply do not have the space required to construct large-scale solar farms. The Australian – ASEAN Power Link has been planned for the Northern Territory, including a 12,000 hectare, 30-GW solar farm along with an undersea cable to export the power to Asia. 

Australia has also announced plans to become a global powerhouse for the export of hydrogen. Plans to produce hydrogen to create materials such as steel without coal, with the only emissions being water, where hydrogen is to be generated using solar and wind projects, agreements already being signed to export this hydrogen to major Asian markets.

The final strategy being the mass implementation of electric vehicles in Australia. This is creates opportunities for more jobs in construction, manufacturing and mining as Australia is rich in the lithium, copper and nickel required to build electric vehicles. 

These strategies place the importance on renewable energy, cementing it as a solid pillar of our economic recovery. Still, it is paramount that our state and federal governments keep sight of their commitment towards constructing renewable energy projects around the country.

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