Dropping battery prices and favorable court rulings may pave the way for wind and solar to displace more traditional sources, although battery installation required for variable renewables remains relatively pricey.
Lockdowns across the world have reduced energy usage and led to a shift in energy sources.
They’ve also changed when and where we use energy, with increases in residential use balancing out decreased commercial and industrial use.
Consumers have also developed a tendency to use power later in the day. The timing of energy use is crucial to the efficacy of renewables since prices increase significantly for solar at nighttime when only stored daytime energy can be used.
“Battery storage can take advantage of abundant and low-cost power: it consumes excess power during the day and redeploys that electricity during the peak periods when conventional power generation would be turned on.” Matt Harper, CCO of Invinity Energy Systems, told Forbes.
The overall reduction in energy usage has been to the benefit of renewable energy over fossil fuels. Coal power is commonly the most costly source to utilize, so it was the first to be reduced when demand fell.
According to the International Renewable Energy Agency (IRENA), over 75 percent of onshore wind and 80 percent of solar photovoltaic capacity installed in 2020 will produce power at lower prices than the cheapest fossil fuel options. Those plants can accomplish this without financial assistance from the government.
This year, for the first time in recorded U.S. history, renewable energy will likely account for a larger share of energy production than coal. Renewable energy was responsible for almost half of the EU’s power generation during Q2.
Utilities and large tech companies are two of the strongest forces behind this trend towards renewables, both because of the rapidly decreasing prices and good publicity. For example, Microsoft pledged to use 100 percent renewable energy by 2025, and have its company and its supply chain carbon negative by 2030.
No utilities are currently planning on building new coal facilities. Still, two major utilities, Duke Energy and Xcel Energy, are expecting to decommission at least four dozen large coal plants by 2025.
Are renewables up to the task of replacing coal?
That may depend primarily on how well new cheaper batteries can hold excess energy and deliver it when needed most.
There are several options for which type of battery can be used, each with its downsides.
Hydrogen storage is long-term but is less efficient. Shorter-term lithium-ion batteries wear down after about ten years. Newly developed flow batteries are energy efficient and last longer. However, they require hard to access materials and do not scale well, according to ElektrikGreen founder Chris Allo.
If flow batteries are used, which would likely be the most cost-effective and efficient option, consumers might have to install their own unless a better way of scaling up is found. Both types of batteries capable of providing storage for a household can cost over $10,000 when including installation and sales tax.
Currently, flow batteries have struggled to compete against lithium-ion batteries because the upfront cost can be up to a third more.