Coal and gas will be more expensive than solar and wind in 5 years

The time when it is more expensive to operate an existing coal or natural gas plant than to build new wind or solar parks is fast approaching. Analysts at Bloomberg New Energy Finance (BNEF) expect a turning point in 5 years.

Solar and wind energy are the cheapest form of new electricity in most of the world today. This is evident from an analysis by BNEF. This is in line with the findings of the International Energy Agency (IEA) that already indicated last week that solar energy is slowing down. takes over coal as the cheapest form of electricity.

point of saturation
According to BNEF, the advance of sustainable energy has an economic limit. "Every country will have to deal with a saturation point," said chief economist Seb Henbest. "That's the point where the technology no longer reduces generation costs compared to existing energy sources."

Depending on local conditions, renewable energy sources will meet no more than 70 to 80% of global electricity demand in the future. Not even in Europe, which has a strict regime to eliminate fossil fuels as much as possible and allow renewable energy sources to gain ground. According to BNEF, wind and solar are unlikely to exceed 80% of the supply in Europe. However, it will take a long time before such results are achieved. Henbest: "That applies to almost every market we look at."

Need less energy
With the shift to renewable energy sources, reform of a number of industries seems inevitable. Shipping is an example of this. One third of all freight by ship worldwide involves the movement of fossil fuels, especially oil. As renewable energy sources gain market share from oil, gas and coal, the shipping companies that supply those fuels will also suffer.

BNEF estimates that coal is one of the most inefficient ways to generate electricity, as 65% of the energy is lost in the combustion process. The energy loss in generating electricity from wind is almost zero. This means that when renewable energy sources take on a larger share in the energy mix, less energy is needed worldwide to generate the same amount of electricity. Ultimately, this could result in a 2 to 3 times lower energy demand, according to BNEF.

Jeanette Pennings

Jeannet has her roots in the flower bulb sector and she grew up on an agricultural company in the northern part of North Holland. As a generalist she reports for Boerenbusiness across all sectors. She is also exploring the possibilities of sponsored advertising.

j.pennings@boerenbusiness. Nl

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