New technologies and the rapid rise of renewable energy have shaken up the global energy landscape, with prices falling to below $0.03/kWh.
“We are now in the world of three cent renewable energy,” said Bloomberg New Energy Finance UK advisory board chairperson and founder Michael Liebreich.
In 2011, solar was praised for coming in at only $0.17/kWh. Five years later, a Moroccan wind project in Dubai set a record for low-cost wind energy at a cost of only $0.0299/kWh, he pointed out.
The investment in green energy has outstripped the growth of nuclear and fossil fuels, with investment in renewables attracting $2 for $1 invested in fossil fuels.
“Renewable energy has also cracked another myth . . . that it’s a rich country’s indulgence. It’s clearly not. More than 50% of clean energy investment is going into the developing world,” Liebreich told delegates at the African Utility Week in Cape Town.
China accounted for one-third of all investment in clean energy, while India and Japan were also investing significantly in clean energy.
The Middle East and Africa, where there have been low levels of investment until fairly recently, were now becoming important emerging markets for investors.
While South Africa is clearly leading the charge in Africa, at $16-billion dollars in investment from 2011 to 2016, Morocco, Kenya and Egypt have also been fairly significant players. $33-billion had been invested in clean energy in Africa overall since 2011, said Liebreich.
He said Africa had proved that it was able to attract foreign investment in clean energy. He expected renewable-energy investment to rise to $7-billion a year, but said it needed to go up by another $5-billion or so.
He said the rapid take-up of solar globally and the consequent drop in price had been an “energy miracle”.
Solar prices have come down 150 times since the 1970s, with volume shooting up 115 000 times. The volume of solar installed had doubled seven times in the last 14 years. Wind-installed capacity had also grown substantially, with volumes going up four times in the past 15 years.
Liebreich said he also anticipated a sharp rise in the production of electric vehicles – “another energy miracle”.
“The launch of the Tesla Model 3 is a game changer. It is the most successful technology launch in recent times.”
A product developed by South African-born entrepreneur Elon Musk, the Tesla 3, notched up 276 000 orders worth $11.6-billion in three days. The BMW i3, the Volkswagen e-Golf and the Chevy Bolt were all strong electric car contenders as well.
“The world is going to move to electric cars. We are going to see an extra 10% of electricity demand because of electric vehicles,” said Liebreich.