There have been various predictions on how and when renewable energy will soon displace coal as the most economical choice for the world’s power needs.
Just recently, Bloomberg New Energy Finance Michael Liebrich founder joined energy experts in saying that the time for renewables to take over will soon come. He estimated that renewable energy would gather roughly 86 percent of some $10.2 trillion investments in power generation by the year 2040.
His predictions do not end there. Liebrich further identified two tipping points that will push coal prices and natural gas to become unattractive.
The first tipping point is “when new wind and solar become cheaper than anything else,” Liebreich said. And this may happen soon. He predicts that it will start by 2025 when it is cheaper to build a Solar PV plant than a coal-powered plant in Japan. Similarly, construction of wind power plants will be less expensive than building coal plants in India by the year 2030.
The second tipping point, he says, is when operating the present coal and gas plants becomes more expensive than getting energy from wind and solar. This tipping point may take longer than the first and may happen first in Germany and China sometime between 2030 to 2040.
With all these forecasts or predictions, there is no denying that renewables will be the most economical source of energy all over the world.
It is then crucial for us to seriously consider capitalizing on the price drops of these RE technologies and move fast in transitioning to heavy dependence on coal to renewable energy.
Aside from being the cleaner form of energy, it is also essential for us to shift to RE because continued dependence on coal and other forms of fossil-fuel will hurt the pockets of our power consumers badly in the future.
The above predictions only say that RE will be the cheapest option due to the declining cost of RE technology. However, there is another reason why coal will be more expensive for us Filipinos.
As renewables take over, we can expect that coal and other similar fossil-based technologies will find it hard to acquire financing for their projects. With the growing clamor for greener technologies, it is likely that financial institutions will institute policies that avoid fuel technologies. Plus, of course, the declining costs of RE will make coal less competitive thus, pushing banks to lend–assuming they will– at significantly shorter maturity. The natural consequence is higher annuities. So, it is safe to say that around the world the cost of coal and other fossil fuels would sky-rocket.
We have to keep in mind that the Philippines only produces low-quality coal and our coal-fired plants are constructed for imported coal. In fact, in 2016, the Philippines imported a total of 20.79 million tons of coal, which is 47.8 percent higher than the imported figure in 2015. And a nation that depends heavily on imported coal will surely suffer from expensive power rates in the years to come as coal becomes more expensive in the world market.
It is indeed time for our regulators and policy-makers to see the writing on the wall. Coal will be more expensive in the future, and our power consumers will pay much higher if we don’t shift our allegiance to RE.
Our regulars have to act now. Otherwise, we will be paying more for our energy consumption, when in fact, cheaper energy has been abundant and available for us for a long time.