Global demand for energy is increasing every year, so is the demand for fossil fuel. As the demand increases due to increase in population size, there is a possibility that we humans may end up using all of it in another century or so. The alarming rate at which we are consuming fossil fuel is contributing to global warming. To make sure that global warming stays in control, United Nation Framework Climate Change Conference, COP 21 (Conference of Parties) had proposed to limit the temperature increase to 1.5-degree centigrade. As of 16th November 2017, 195 parties signed the agreement and 170 parties ratified it. All the parties to COP 21 have increased their contribution towards renewable energy such as solar energy wind energy, Small hydro plant, etc. There is a possibility that renewable energy may replace conventional sources of energy. The question is how soon the change will happen given the many different variables involved. Chief of them is the rate at which renewable energy grows and the rate at which global energy demand rises. If one year demand can be met by renewable energy sources then we will be able to say that renewable energy is at parity with conventional sources of energy. According to a study in the University of Oxford in 2007 if the percentage of renewable energy grows at 5 % per year and global energy demand grows at .5% every year then we may reach the tipping point in 2033 and if global energy demand grows at 2% every year the tipping point will occur in 2118. A one MWh solar power plant working at plant load factor of 21% and whose annual electricity generation estimate would be 1840 MWh can replace 979 Ton of coal and save 1783 ton of co2 emissions. The international energy agency says that renewable energy may replace conventional energy in half a century.
Production of renewable energy has boomed in recent years. Driven by improvement to solar and wind turbine, increased economies of scale and government subsidies. Because of such benefits and changes per unit cost of renewable energy is almost equivalent to power produced by conventional sources. According to a report by Lazard, the unsubsidized price of energy has already reached parity in some market and area of the United States.
In India, according to MNRE the lowest cost of renewable electricity that has been generated is at Rs2.44 per unit for wind and solar. Whereas according to NTPC lowest cost of generation of coal-powered energy is at Rs1.65. Cost of renewable energy production has almost reached the cost of conventional energy production however, cost factor is not the final deciding parameter. To say that renewable energy is at parity with the conventional source of energy, RE sector needs to overcome some of the challenges such as
- The special benefits and significant incentives schemes (Tax benefits, double depreciation, research and development incentives etc).
- Grid efficiency
- Affordable/ Cheap storage facility
- Unreliable Base-Load power generation from RE sources (base load refers to a power plant that offers electricity 24*7)
As the efficiency of RE is increasing due to incentives that are given in R&D and the push due to COP 21 there is a chance that the cost to set up an RE power plant and payback period will reduce. As stated above grid efficiency is one of the challenges. IEA (International Energy Agency) states that existing grid can accommodate up to 10% renewable sources for free. Operators will not have to modify the control to take full advantage of the new capacity, however, post 10% the grid needs to be intelligently re-optimized to build such a grid in developed nations is a challenge. Solution to this problem is “Smart Grid”.
Another major drawback for RE generator is to provide baseload power. Geothermal and hydropower plants are already being used for baseload power in some area of the United States. This depends on specific geological features that are not available across the countries. A solar thermal power plant is capable of providing baseload power however it still needs further development as it has a scaling issue. Usually, other sources of renewable energy like solar power generation from PV cells and wind energy has their own issues of uncertainty as solar power depends on the availability of sun and totally depends on weather conditions. Wind power depends on the availability of wind in an area. At times the power produced from such sources is more than the required quantity and if there is no storage facility then the generated power is lost/Wasted. To store power is one solution. Power storage can be done in many ways.
Few of them are
- Compressed air energy storage.
- Flywheel energy storage
- Pumped- storage (hydro electricity )
- Superconducting magnetic energy storage
- Rechargeable batteries
- Molten salt storage
Many of these techniques are still being developed for better efficiency and once the proper technology for storage of extra power is generated at a low cost of installation of such technology the chance of renewable power to provide electricity 24*7 will be more accepted.
Once the above issues will be addressed only then can the renewable sector come at parity with conventional sources of energy.
The blog is prepared by Mr. Niraj Raj, (student, MBA in Sustainability Management specializing in Operations at Xavier University Bhubaneshwar) during his internship at RSM GC. His profile https://www.linkedin.com/in/niraj-raj-7ba21411a