Preparing for the elements
Renewable technology innovations will continue to drive down costs and address intermittency challenges, but we need to draw on a broader range of resources. Some advances are imminent, others will take decades, but we must create the conditions today to deal with tomorrow’s disruptions.
Developed in 1954, the world’s first high-power silicon solar cell had a maximum efficiency of 6% and cost around US$286/watt. Today, typical efficiency is 15% and rising, while the average solar panel costs US$0.80/watt and falling.
This kind of innovation has been the cornerstone of the sector, covering both the adaptation and improvement of existing technologies, and the introduction of more disruptive technologies with greater potential to shake up the sector.
Looking to the four elements
Surging electricity demand and energy security concerns, climate change, and the increasing competitiveness of renewables, continue to prove renewable energy as a critical part of the overall energy mix.
But this focus cannot be on just one or two technologies. As the shining beacon that is grid parity comes in sight for an increasing number of projects, we must not be complacent.
More mature technologies should not cannibalize support for emerging ones, and austerity measures and a focus on affordability should drive innovation in cost-reduction rather than simply favoring the cheapest technologies.
With the Earth’s landmass representing only 30% of its total area, and populations surging, we must use all the elements — earth, fire, wind and water — to make the most efficient use of resources if we are to create a truly sustainable and cost-effective energy supply.
Preparing the way
Innovation is of course largely driven by scientists, researchers, engineers and entrepreneurs, but we must always look to the future, and how today’s economics impact tomorrow’s energy solutions.
Governments must create policy environments that balance affordability and certainty; investors need to better understand the changing risks and rewards; and energy generators must adapt to new technologies. Increased engagement with, and by, large corporates can also foster innovation and introduce new capital flows.
At EY we know innovation in technology must be met by innovative business models and financing solutions, and we are working to facilitate the connections between entrepreneurs, financiers, corporates and government that accelerate clean energy innovation.
Engagement with stakeholders across the sector becomes ever more critical as a renewed focus on affordability creates new — and often more difficult — dynamics for capital flows and infrastructure deployment.
Innovation driven by the need to drive down costs must be supported by operational synergies, efficient tax structuring and cost-effective financing.
The disruption timeline
So, which new technologies are already creating waves, and which are still up in the air?
Ever-changing policy and investment climates make the success of emerging technologies unpredictable. However, we have identified a sample of technological innovations that could be disruptive in the short, medium and long term as commercial scale is achieved.
Our feature article looks at the innovations impacting the following types of renewable resource or enablers:
- Concentrated solar
- Onshore wind
- Floating offshore wind
- Organic solar
- Ocean thermal
- Solar application