As the threat of global warming rises, climate change has forced governments worldwide to step up and work towards a green energy transition, which prioritises using renewable sources over fossil fuels. Under the Paris Agreement, over 180 governments pledged to meet net zero carbon emissions by 2050. Still, these efforts have been slowed by the unfavourable cost estimates of energy efficiency. In this article, we'll discuss the results of Rupert Way's revolutionary 2022 study and what it means for the future of green energy.
The Challenges Faced by Energy Economists
Historically, energy economists have faced significant challenges around the models they use to predict the costs of a greener future. Most of these models underestimate how efficiently renewable energy technologies can be deployed, especially in developing nations, and overestimate the costs involved in rolling out such programs.
The Task: Developing Reliable Cost Forecasting
In the face of these challenges, energy economists have been searching for ways to reliably forecast the cost of renewables, both in their development and deployment. Using a method backed by statistically validated data that spans over 50 technologies, Way's study has been able to estimate the costs of future systems that produce, store and distribute energy over three different scenarios: the introduction of solar power, wind batteries and electrolysers.
Through analysis of the probable costs of these "key green technologies", Way has been able to outline the cost benefits of a green energy transition and highlight the need for urgency on renewables. Way's methodology stands in stark contrast to those traditionally used to inform the Intergovernmental Panel on Climate Change (the IPCC), which is significant. Usually, it is this information that drives climate policy.
The Cost Benefits Of A Rapid Green Energy Transition
Through applying a more reliable methodology, Way's study better highlights the true benefits of a rapid green energy transition. It concludes that, compared to the current fossil fuel-based system used worldwide, a renewable transition "is likely to result in trillions of net savings."
The study also laid out predictions that don't account for climate damages or policy co-benefits, and these show that the net-zero by 2050 transition is still highly likely to be economically beneficial. This conclusion differs from many energy economists who, through the use of outdated or unreliable methodology, argue that the costs involved in the net zero transition will be unattainable for global governments, especially those in developing nations.
What Can We Learn From Way's Study?
Way's study shows that across solar, wind batteries and electrolysers, technology is improving at a consistent pace. Alongside this, the models used to forecast their costs drive optimistic rather than pessimistic future predictions. This shows that with updated energy economy models and re-evaluating our expectations, we can drastically speed up the decarbonisation of the world's energy systems.
As the threat of climate change grows, it's more important than ever to implement green solutions, and Way's study goes a long way to support nations concerned about the cost of renewable technology.
