The Increasing Affordability of Clean Energy
Climate change is a serious problem, and it’s time to address it. This topic of contention has divided political parties and scientists alike—yet the evidence is clear, at least according to the Intergovernmental Panel on Climate Change, who argues, “Scientific evidence for warming of the climate system is unequivocal.” The effects of global warming aren’t just limited to melting ice caps and polar bear displacement, either. With more frequent extreme weather events directly caused by damage from fossil fuels, economic losses totaled a whopping $240 billion dollars, as outlined in a report by the Economic Case for Climate Action in the United States. Corporations are starting to pay attention.
Wind and solar energy have been the faces of alternative energy for consumers and businesses alike, specifically for their price point. Wind turbines, for example, have grown in sophistication, increasing their usability in locations with below average wind speeds. At the same time, their design has evolved to a larger size with higher durability, both resulting in increased energy output. The prices speak for themselves—currently, an onshore wind turbine produces an average of $0.06 kWh (per kilowatt hour) with many producing as low as $0.03 kWh compared to fossil fuels, which range from $0.05 to $0.17 kWh. Solar energy has also seen a steep drop in price with a notable gain in popularity. According to the International Renewable Energy Agency, solar energy is a cheaper alternative to traditional nuclear power. For example, the levelized cost of electricity generated from these solar panels has dropped 69% from 2010-2016. Businesses are starting to take notice.
Goldman Sachs is a leader in private investment in renewable energies. The investment firm has funded several different eco-friendly projects with the ultimate goal of investing $150 billion by 2025. Goldman Sachs is also one of the few to transition their investment projects in-house. The bank has continued its own push to be more eco-friendly and cost-efficient by purchasing a 68 acre wind power farm to power its operations—another step towards its goal of 100% clean energy usage. Traditional fossil fuel companies are even starting to change their business models. Starting in late 2017, Shell began investing in various solar and natural gas companies and have since invested more than $400 million in a wide range of clean energy acquisitions with markets clearly favoring the renewable energy industry domestically and worldwide.
The renewable energy industry is largely funded with private investments with many governments hesitant to lose trade advantages and financial influence that the coal and oil industry hold, which, given the rapid advancement in the functionality and affordability of these clean energy sources, is nothing short of remarkable. There is clear opportunity for continued advancement in the near future, as a result of certain policies– especially in regard to carbon taxes, which some estimates give $200 billion in revenues just within a decade if implemented. However contentious the topic may be, it is important to address our fossil fuel consumption, and innovators and engineers are taking notice. With the technology improving and businesses increasingly saving money, it’s nothing but blue skies ahead for the clean energy industry.