7 Apr 2017 10:00am

Debate: is renewable energy economically viable?

In this month's debate, we ask: has the time come to take renewable energy seriously?

Caption: Is renewable energy economically viable?

Rob Jeffrey, senior economist, council member of the Fossil Fuel Foundation

“Emerging nations must address three fundamental issues: inequality; unemployment; and poverty. These problems can be remedied only by raising the economic growth rate. The fact is that renewables are highly variable, often supplying power when not needed and not supplying power when needed.

“Apart from their detrimental environmental impacts, renewables – primarily wind – are partially the cause for slower economic growth, and hence rising unemployment, reducing living standards and increasing energy poverty. They are part of the cause of the political backlash in Britain and the US as evidenced by Brexit and the election of Donald Trump as president.

“Environmentalists lobby financial institutions and governments. The appeal for financial institutions is more secure profits because of index-linked guaranteed prices and subsidies from governments. Governments benefit through additional taxes, which are partially used to subsidise the renewable energy programmes. Resulting carbon taxes and higher electricity prices are regressive with people
on lower disposable incomes paying more than people on higher incomes. Consequently, these taxes and renewables are in effect taxes on the poor.”

Michael Drexler, head of long term investing, infrastructure and development at the World Economic Forum

“Renewable energy has reached a tipping point – it now constitutes the best chance to reverse global warming. Solar and wind have just become very competitive, and costs continue to fall.

“It is not only a commercially viable option, but an outright compelling investment opportunity with long-term, stable, inflation-protected returns.”

Ben Warren, EY’s head of energy and environmental finance

“Few would argue that recent advances in technology coupled with falling costs mean that many renewables projects, particularly onshore wind and solar PV, will be cost-competitive and subsidy-free within the next three to five years. The era of competitive renewable energy is fast approaching.

“The declining cost of electricity generated by renewable energy, twinned with the advantage of solar and wind having minimal running costs, has attracted serious attention from large utilities, investors and even oil majors.

“Unease about the level of subsidies given to renewables has forced the industry to become more price competitive and several recent auctions have demonstrated how government tariff-based revenue is no longer as critical as initially believed.

“Smart metering, battery storage and better electricity transmission networks can all play a part in tackling the unpredictability of weather-dependent wind and solar assets.

“These technological advances, increases in production volume and the growth of local economies mean that renewables can now compete with other elements of the power grid, driving a fundamental change in its structure and regulation.”

David Weatherall, head of policy, Energy Saving Trust

“There has been a concerning trend in recent years to only see the costs of decarbonisation. This rhetoric simply doesn’t take into account the obvious fact that investing in renewable energy and energy efficiency delivers significant benefits that bring energy bills down.”

Lord Hollick, Economic Affairs Committee chairman, commenting on the Committee’s report The Price of Power: Reforming the Electricity Market

“Poorly-designed government interventions, in pursuit of decarbonisation, have put unnecessary pressure on the electricity supply and left consumers and industry paying too high a price.

“Renewables play, and will continue to play, a crucial part in energy policy. Costs have been reduced and efficiency has improved. New clean technologies must be supported to be commercially viable. A new National Energy Research Centre would also help the UK to catch other countries up in the race to find cost-effective solutions to the challenges the world faces on energy.”

Catherine McKenna, Canada’s minister of environment and climate change

“If you’re worried about debt being left to our kids, you should be outraged by the price they’ll pay for the damage caused by climate change”

Doug Parr, policy director at Greenpeace UK

“We already produce 25% of our electricity from renewables and Britain could economically produce over 80% of its power from renewable energy by 2030. Clean energy technologies are maturing, and costs are reducing.

“Renewable energy, together with battery storage, interconnectors and energy efficiency, provides economically viable, secure and reliable energy, and a substantial solution to intermittency. It creates jobs and economic growth, and will keep bills fair. The costs for battery storage are predicted to fall by 70% over the next 15 years, and integration costs bring additional economic benefits (for example for EVs) and a secure domestic market for global export.

“By 2030, we could install 77GW of wind power, and 28GW of solar, and keep the lights on 24/7. Prices could be as low as £45-72/MWh for onshore wind and £52-73/MWh for solar. Offshore wind costs have fallen by 32% since 2012 and it will be deliverable for £80/MWh by 2025. DONG and Vattenfall have already won contracts for offshore wind in the Netherlands and Denmark that are cheaper than nuclear. Worldwide, by 2030, the jobs market will be delivering 7.8 million jobs in wind and 9.7 million jobs in solar. It would make sense for UK to get a slice of that.”

Wade Allison, member of Supporters of Nuclear Energy (SONE), and emeritus professor of physics at the University of Oxford

“Civilisation needs an increasing amount of environment-friendly energy that is available 24/7 where people live, but ‘renewables’ do not solve this problem.

“Renewable energy can make a useful contribution at certain times and places: including hydro; solar when the sun shines; and wind power. But their output is not steady and reliable, whatever the investment, as the people of Australia recently found when they suffered extensive blackouts.

“The scale of compact storage technology is limited by fundamental chemistry; and stored energy that can be rapidly released is highly dangerous. Exploding batteries in laptops and phones have been in the news and larger accidents with electric cars seem likely. At best the energy stored behind a dam is effective, but 200,000 inhabitants of Oroville, California, recently learned how life-threatening that can be.

“Bio-fuels disrupt agriculture and frustrate photo-synthesis – the only large scale carbon capture technology we have – by releasing carbon back into the atmosphere.

“So renewables cannot be the main solution, regardless of the investment made.”