Why Renewables Will Disrupt the Energy Industry
As a society, we have experienced a number of different technological shifts. The interesting fact about these changes is that they do not happen because we run out of one of the main components that make the technology possible. They happen because a new option makes way and disrupts the status quo.
For example, do you remember the Stone Age, the time when we used stones for practically everything? It didn’t end because we ran out of stones; it ended because we found out how to make more productive tools out of bronze.
Remember the horse era, when people got from point A to point B on a four-legged animal, commonly known as a horse? That didn’t end because of a massive horse extinction; it ended because the internal combustion engine came along.
This brings us to one of the biggest transitions mankind is experiencing; the shift away from fossil fuels towards renewable energy to power our planet. This transition will (hopefully) share the same fundamental characteristic as the previous disruptions; we won’t have to run out of fossil fuels to switch over to renewables. Renewable energy technologies are more than ready to take over the way we supply our electricity needs, in fact, they already are.
Last year, renewable energy investments and new installed capacity reached record heights. Approximately $286 billion was invested in renewables (more than six times the amount invested in 2004), and for the first time, more than half of all new added electricity generation capacity came from renewables.
Just in the first quarter of 2016, solar made up 64% of new electricity generating capacity in the US, more than coal, natural gas and nuclear power combined.
As you see, there are proven options out there that are already disrupting the status quo. Options that not only great investments, but are also better for our health and the environment.
Why are these technologies disrupting the status quo?
One of the biggest reasons that renewable technologies will substitute fossil fuels is that their main source of fuel is free and inexhaustible. Wind and solar do not require purchased fuel, as opposed to non-renewable ways of generating electricity, such as coal, and natural gas.
The probabilities of the sun not coming out one day or the wind not blowing are pretty slim. Therefore you probably won’t see shortages of renewable fuels.
Unless someone figures out a way to charge you for the sun or the wind, once you install a renewable energy system, the fuel costs needed to power it for its useful life are going to be ZERO.
On the other hand, fossil fuels depend on limited resources that will run out in the near future, the fact that there is a limited amount means that its price can and will go up. This means that renewables can provide an important protection against fossil fuel price volatility.
Falling Costs and Efficiency Improvements
Another reason why renewables will take over fossil fuels is the fact that the technology’s costs keep falling and its performance improving.
The cost of solar has fallen to the point where it is now cheaper than fossil fuels in many places around the world. Its cost has fallen 99% since 1977 and 80% since 2008, and is expected to fall another 40% in the next two years.
This leads to futurists like Ray Kurzweil (who predicted mobile Internet, cloud computing, and wearable tech nearly 20 years ago, and is right 86% of the time) to predict that solar will be the dominant source of energy in the next 12 years. Why? He says that solar is based on the same principle as these other technologies. This principle is known as the Law of Accelerating Returns, which states that as technologies get smaller and cheaper, their growth becomes exponential, which is what we’re seeing with solar.
So, what does this exponential growth mean? Currently, solar supplies about 2% of the global energy needs, but that’s up from 0.5% only 4 years ago. Meaning that solar has been doubling its market share every two years. If this doubling keeps on going, we’re only six doublings away (or 12 years) from reaching 100% of the energy supply.
There you go; the numbers back it up. We have everything we need to leave dirty fossil fuels in the ground and power our planet with clean renewable energy. What we need is more people joining the revolution to make this transition happen as fast as possible.
If you’d like to learn more about how to get involved in renewables, I set up a free e-course that explains more about why this revolution is going on and how you can get involved. You can sign up right here. Thanks for reading!