Improving Cost Competitiveness of Renewables Provides Benefits amidst Need for Future Growth and Sustainability

Improving Cost Competitiveness of Renewables Provides Benefits amidst Need for Future Growth and Sustainability

As economic variables largely determine investment flows within the sustainability industry, improved cost factors need to be coupled with other measures for improved technology proliferation.

Recognizing the complementary benefits of using a variety of technologies by Team Gemini’s growing offering, improvements in economic models can help advance sustainable infrastructure and projects. As awareness spreads about the environmental and economic gains from renewables, one of its increasingly-relevant selling points is the improving cost competitiveness of technologies.

Data by Lazard. Chart by CleanTechnica | Zachary Shahan.

While solar and wind dominate renewable electricity generation in the U.S. and other parts of the world, and are therefore among the top beneficiaries of improved costs, holistic sustainability measures ultimately depend on a variety of technologies to thrive. To help with this effort, some challenges still need to be resolved to make financing more lucrative and spread the benefits of improved costs.

Renewable energy is now the cheapest option, on average, for new electricity capacity around the world — in developed countries like the US as well as developing countries like India, China, Nigeria, and Mexico.

One problem is simply lack of awareness that renewables have become cost-competitive and mature industries — hence the ongoing work from IRENA to bring that information to more people (particularly via regional reports).

Similarly, the long-term reliability and performance of renewable power projects is still not inserted into the equation properly, raising the cost of financing beyond what it logically should be.

Overall, “the broader issue is risk mitigation,” Amin highlighted. Technology risk assumptions are too high now that the technologies are proven and reliable. Financiers need to get up to date on the effectiveness and reliability of modern renewables. “What we see is the cost of capital for renewable projects worldwide is unrealistically high,” Adnan Z. Amin pointedly stated.

Policy risk is another factor still in need of remedy. Stable, long-term policies that reduce investment/business risk are critical to quicker clean energy installation. Policies that developers and financiers can feel confident will be in place for many years to come and do not obstruct renewables are a fundamental necessity.

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