There has been an outstanding amount of renewable energy production in the last decade. Because of this huge increase in the amount of renewable energy available, the prices are dropping at record rates. The biggest change is that one of the most expensive forms of green energy, offshore wind, will now be the cheapest. The prices of offshore wind are expected to slide by 71% over the next two decades according to Bloomberg New Energy Finance.
What This Means for the Energy Industry
This means that offshore wind prices will be competitive with renewable energy sources _and _nonrenewable sources. The results of Bloomberg’s NEO, or their annual long-term economic forecast of the world’s power sector, found that renewable energy sources will represent almost three-quarters of the $10.2 trillion the world will invest in new power generating technology until 2040.
What This Means for the Customer
Because there is growing technology for battery storage and a better understanding of supply and demand, renewables will take control of the energy market over the next 20 years. Renewable energy prices will not only be competitive, but extremely less than traditional energy prices.
So what does this mean for the customer? It means that energy prices will drop rapidly over the next 10-20 years. If renewable energy keeps up its power and pace, we can see price drops in as little as 5 years.
How Utilities are Reacting
Renewable energy is revamping the way utilities have always run. Renewables will be able to reduce the costs of electric down to levels that fossil fuel sources could never reach. Solar is competitive with coal and natural gas, and wind power coming from the ocean will be even cheaper.
Utilities are starting to realize that every type of energy will be able to make money. Eventually, “only the good performers can make money,” as said by the chief digital officer at General Electric Co.’s energy connections unit, Steven Martin. And it looks like renewable is, and will continue to be the best performer out there.
Sources: Bloomberg, about.bnef.com