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Renewable energy pricing may already have reached levels that are comparable to, or even cheaper than, conventional fossil fuels, but this does not mean that government help is no longer required to facilitate the industry’s development, according to the president and CEO of GE Renewable Energy.
Speaking on a panel addressing urbanisation at the World Future Energy Summit in Abu Dhabi on Tuesday, Jerome Pecresse said that "even in a world where renewable is competitive ... a price of carbon is needed to force accelerated decommissioning of the existing thermal power capacity".
A paper published on Saturday at the Irena assembly in Abu Dhabi stated that the cost of utility-scale solar photovoltaic energy had dropped by 73 percent between 2010-17 to $0.06 per kilowatt hour, while onshore wind power had fallen in price by one quarter to $0.10 per kilowatt hour. It also predicted that both would fall further in price by 2020 to $0.03 and $0.06 per kWh respectively, making them cheaper than conventional energy derived from fossil fuels, which it priced in a range of between $0.05-$0.17 per kWh last year, depending on the fuel source and country.
"I think we no longer need tariffs," Pecresse said. "I think, we still need in some places, some penalties on CO2 emissions to continue to push governments to respect Paris (Agreement climate change) targets."
He added: "We need a stable regulatory regime, so people know that when they finance a project, that project will happen in the condition it was planned to happen."
Pecreese also sounded a warning over the use of auctions by successive governments as a method for agreeing long-term electricity supply prices with consortiums bidding to develop utility-scale renewable energy projects.
He said that auctions had generally brought benefits, but added that governments need to regulate them "to make sure that it is not necessarily only the cheapest project that wins, but the one that has execution certainty and brings local content where local content is required".
"Because sometimes, the cheapest project is not going to be the one that gets executed."
Speaking on the same panel, Manoj Kohli, the executive chairman of Japanese technology investor Softbank's energy division, argued that a "massive transformation" was underway in both the energy and transport sectors which would make both much cleaner.
He said that the world's urban population is set to grow from 45 percent to 65 percent "in the next decade or so" (Zawya could not verify this, but a United Nations report published in 2014 stated that the global urban population would increase from 45 percent in that year to 65 percent by 2050).
"Clearly, urban areas need a new solution in terms of smooth energy and smooth transportation, but also clean," Kohli said. "It's very important to make it clean because 80-90 percent of pollution across the world - whether you go to Beijing or Delhi or other polluted cities - comes from power plants which are thermal, and vehicles which are petrol or diesel."
Kohli also said that Softbank "has been involved as an advisor" in Saudi Arabia's plans to build a new, $500 billion city on the Red Sea coast, NEOM, that will be completely powered by renewable energy.
"We are helping the government and helping the NEOM city team on building clean energy through solar, through storage and of course, through wind," he said. "Because we believe that a combination of solar for daytime, wind for night and storage, which is becoming more affordable, can be fantastic for a new city which is 100 percent to be served by renewable (energy)."
Several new agreements were announced at the World Future Energy Summit on Tuesday, including the agreement of a new $188 million funding package arranged by the International Financial Corporation (part of the World Bank) for Jordan's largest solar PV project, Saudi Arabia's Abdul Latif Jameel Energy announcing that it had gained financing for a solar PV scheme in Mexico that will power 150,000 homes, and Abu Dhabi's Centre for Waste Management, Tadweer, announcing that it had signed five contracts with waste companies worth a combined 165 million dirhams ($44.92 million).
Further reading: Abu Dhabi to invite bidders for second solar power plant
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Saudi ACWA Power becomes first utility-scale generator to adopt SolarCoin
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(Reporting by Michael Fahy; Editing by Shane McGinley)
(michael.fahy@thomsonreuters.com)
Our Standards: The Thomson Reuters Trust Principles
Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.
© ZAWYA 2018
Speaking on a panel addressing urbanisation at the World Future Energy Summit in Abu Dhabi on Tuesday, Jerome Pecresse said that "even in a world where renewable is competitive ... a price of carbon is needed to force accelerated decommissioning of the existing thermal power capacity".
A paper published on Saturday at the Irena assembly in Abu Dhabi stated that the cost of utility-scale solar photovoltaic energy had dropped by 73 percent between 2010-17 to $0.06 per kilowatt hour, while onshore wind power had fallen in price by one quarter to $0.10 per kilowatt hour. It also predicted that both would fall further in price by 2020 to $0.03 and $0.06 per kWh respectively, making them cheaper than conventional energy derived from fossil fuels, which it priced in a range of between $0.05-$0.17 per kWh last year, depending on the fuel source and country.
"I think we no longer need tariffs," Pecresse said. "I think, we still need in some places, some penalties on CO2 emissions to continue to push governments to respect Paris (Agreement climate change) targets."
He added: "We need a stable regulatory regime, so people know that when they finance a project, that project will happen in the condition it was planned to happen."
Pecreese also sounded a warning over the use of auctions by successive governments as a method for agreeing long-term electricity supply prices with consortiums bidding to develop utility-scale renewable energy projects.
He said that auctions had generally brought benefits, but added that governments need to regulate them "to make sure that it is not necessarily only the cheapest project that wins, but the one that has execution certainty and brings local content where local content is required".
"Because sometimes, the cheapest project is not going to be the one that gets executed."
Speaking on the same panel, Manoj Kohli, the executive chairman of Japanese technology investor Softbank's energy division, argued that a "massive transformation" was underway in both the energy and transport sectors which would make both much cleaner.
He said that the world's urban population is set to grow from 45 percent to 65 percent "in the next decade or so" (Zawya could not verify this, but a United Nations report published in 2014 stated that the global urban population would increase from 45 percent in that year to 65 percent by 2050).
"Clearly, urban areas need a new solution in terms of smooth energy and smooth transportation, but also clean," Kohli said. "It's very important to make it clean because 80-90 percent of pollution across the world - whether you go to Beijing or Delhi or other polluted cities - comes from power plants which are thermal, and vehicles which are petrol or diesel."
Kohli also said that Softbank "has been involved as an advisor" in Saudi Arabia's plans to build a new, $500 billion city on the Red Sea coast, NEOM, that will be completely powered by renewable energy.
"We are helping the government and helping the NEOM city team on building clean energy through solar, through storage and of course, through wind," he said. "Because we believe that a combination of solar for daytime, wind for night and storage, which is becoming more affordable, can be fantastic for a new city which is 100 percent to be served by renewable (energy)."
Several new agreements were announced at the World Future Energy Summit on Tuesday, including the agreement of a new $188 million funding package arranged by the International Financial Corporation (part of the World Bank) for Jordan's largest solar PV project, Saudi Arabia's Abdul Latif Jameel Energy announcing that it had gained financing for a solar PV scheme in Mexico that will power 150,000 homes, and Abu Dhabi's Centre for Waste Management, Tadweer, announcing that it had signed five contracts with waste companies worth a combined 165 million dirhams ($44.92 million).
Further reading: Abu Dhabi to invite bidders for second solar power plant
Etihad ESCO selects Siemens & Smart4Power for retrofitting at Dubai International Airport Terminals
UAE's Masdar and Envyron Energy, subsidiary of Alliances for Global Sustainability, collaborate on plastic-to-fuel technology
Saudi ACWA Power becomes first utility-scale generator to adopt SolarCoin
UAE exerting efforts to diversify energy mix: Sultan Al Jaber
(Reporting by Michael Fahy; Editing by Shane McGinley)
(michael.fahy@thomsonreuters.com)
Our Standards: The Thomson Reuters Trust Principles
Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.
© ZAWYA 2018
