IEA: Solar, wind power rapid cost reduction may enable new options for greening industry

Assessing the potential for renewables in upcoming decades, a newly published report by the International Energy Agency (IEA) underlines the vital importance of the recent rapid cost reductions in solar photovoltaics and wind power, noting that one of its main findings is that greening the industry may be achieved either directly from electricity or through the production of hydrogen (H)-rich chemicals and fuels.

Noting that solar, hydro and wind have enormous potential for use in industrial processes, as they both offer an opportunity to offset carbon emissions and provide cheaper power, the report notes that simultaneously, electrification offers new flexibility options to better integrate large shares of variable renewables into grids.

Since procuring electricity from renewables stands as the most active area of renewables uptake in the industrial sector today, the IEA report titled Renewable Energy for Industry shows that in terms of power generation capacities additions to directly serve commercial, industrial and public consumers, the most prominent role is played by commercial-scale solar PV, which made up 10% of all new additions in the previous year.

Pointing to the renewables procurement movement among large companies with many of them now committed to go 100% renewable, the report says that at the end of June 2017 there were 96 of them, including Lego and Microsoft which have already hit the targets, adding that in 2015 60% of renewable power procured by RE100 companies came from the purchase of renewables certificates, and another 35% through green contracts or tariffs with utilities.

In regions that are especially rich in renewables, such as Australia, the Horn of Africa, North Africa, northern Chile, southern Peru, Patagonia and South Africa, as well as several regions in China and the Midwestern United States, the IEA sees the potential for the industry sector’s switch to green as particularly high. According to it latest report, the cost of hydro, solar and wind power in these regions can fall below $ 0.03/kWh and supply an electricity load with high load factors, particularly when combined.

In its recently released Renewables 2017 report, the IEA showed that solar PV capacity grew 50% last year, faster than any other fuel, to reach 74 GW, and suggested that renewable energy can reach 1,000 GW globally by 2022.