The writing’s been on the wall for some time now – due to declining costs for generating renewable energy, the rising threat of climate change, and advancements in renewable energy technology, it’s clear that fossil fuels are on their way out. But while it might only be a matter of time before carbon-based fuels are replaced by clean renewable energy, what method of producing clean energy might we see in the future?
There are arguments to be made for the potential dominance of any of the many different types of clean energy available, and one of the most important factors is cost. The cheapest type of renewable energy would likely win out and become the main power source for our future. However, there are also other considerations such as stability and regional suitability. Here’s a look at how much clean energy generation costs, as well as some of the other pros and cons of each technology:
Solar PV is one of the most well-known forms of renewable energy today, and can even be installed directly onto your private home. This technology utilizes solar panels to convert sunlight directly into electricity, and is tied with wind energy when it comes to total installed capacity.
The International Renewable Energy Agency (IRENA) estimates solar PV to have a very low global Levelized-Cost-of-Electricity (LCOE) at only $0.039/kWh in 2021. LCOE is calculated by dividing the total cost of setting up a solar power plant by the estimated amount of electricity it can generate during its lifetime and is one of the typical measures used to describe the cost of electricity.
Concentrated Solar Power (CSP)
Another less common solar technology is known as concentrated solar power or CSP. In simple terms, this technology utilizes concentrated heat energy from sunlight to heat water into steam, which then turns a steam turbine to generate electricity.
CSP’s relative unpopularity is mostly due to its higher costs, which sit at an estimated $0.0750 in 2021, almost double that of solar PV. Despite being more expensive, however, CSP does also offer more stable power generation compared to solar PV: heated liquid in the CSP system can be easily stored and used to generate electricity at all times, while solar PV is reliant on more inefficient solar battery storage to provide electricity when the sun goes down.
Wind energy capacity has increased by 15% globally each year for the past decade, and output is set to grow by 275 terawatt-hours in 2021, making it the single fastest-growing source of clean energy in the world.
But while the wind is leading the pack in terms of new capacity, onshore wind energy’s LCOE is estimated to be $0.043/kWh on average globally in 2021, making it slightly more expensive than solar. Offshore wind is even more expensive, coming in at $0.115/kWh in 2019 and an estimated $0.082/kWh in 2023.
Hydropower is one of the oldest forms of technology in the world, and today it has evolved from simple watermills into massive hydroelectric dams. This long history makes hydropower a relatively mature renewable technology, especially compared to wind and solar. This means that hydropower costs are unlikely to decline significantly in the future, unlike newer forms of renewable energy.
Hydropower is also highly dependent on geography – you generally need a large river on which a dam can be built. As a result, the cost of generating hydroelectricity also varies heavily between countries and projects. On average, large hydropower plants built between 2010 and 2020 have produced electricity at an LCOE of $0.040/kWh in China and Brazil, $0.080/kWh in North America, and $0.120/kWh in Europe. While hydropower might have been the cheapest renewable a decade or two ago, wind and solar costs have already caught up and are only getting lower while hydro stagnates.
Geothermal energy taps into the heat within the Earth’s crust to produce power. Superheated water or steam is brought up from deep underground into a geothermal power plant, which uses this heat to turn turbines and generate electricity. It shares many of the same strengths and advantages as hydropower: unlike wind and solar, geothermal and hydropower are “always-on”, able to produce power at all times without the need for battery storage. Much like hydropower, however, geothermal plants can also only be built in specific locations.
Geothermal energy’s LCOE is very competitive though. While the global average LCOE of geothermal projects varied from $0.05/kWh to $0.07/kWh between 2010 and 2019, this goes down to a mere $0.04/kWh when we only consider new geothermal plants built on already-developed fields. This makes geothermal energy costs comparable to that of wind and solar, and it’s little wonder that this stable and clean energy source accounts for a large share of electricity generation in suitable countries such as Iceland, New Zealand, and the Philippines.
Exporting renewable energy might soon be possible
Solar PV might be the clear winner here when we only consider costs, but the situation isn’t as simple as that. Each of the different technologies listed above is suitable for different environments, meaning that for now there is no clear-cut “best” form of renewable energy which we can expect to take over in the future.
However, exciting new developments in hydrogen fuel technology might soon change this playing field. Hydrogen can be converted into usable electricity via fuel cells, and it is currently possible to create hydrogen using renewable power from wind or solar farms. This created hydrogen can then be exported, meaning that even locations lacking in solar or wind resources can access clean energy. This technology might also help us get around the geographical restrictions of geothermal and hydroelectric power.
For now, the technology is still in its infancy, and largely uneconomical for practical use. But it does offer an exciting glimpse into what could be possible for renewable energy in the future.
When green hydrogen becomes an economic energy carrier it will be the beginning of the end of most fossil fuels and chemicals.