Energy Transitions Commission (ETC) has officially published the results from a landmark report named Power Systems Transformation: Delivering Competitive, Resilient Electricity in High-Renewable Systems.
Going by the available details, the stated report claims that global power systems dominated by wind and solar generation can now reliably deliver electricity at costs comparable to or lower than today’s fossil fuel-based power systems, and they can do so across most parts of the world.
To understand the significance of such a development, we must dig into how electricity is projected to provide up to 70% of global final energy consumption in a decarbonized energy system, growing from around 20% today. In fact, total global electricity demand could potentially triple, reaching 90,000 TWh by 2050 compared to 30,000 TWh today.
Talk about the given report on a slightly deeper, it begins by showcasing significant regional opportunities. For instance, Sun belt” countries – including India, Mexico, and much of Africa were found to be best-positioned in the context of cutting power system costs, something they can do by transitioning to low-cost, solar-led systems, which mainly require day-night balancing.
On the other hand, “wind belt” countries, such as the US, UK, Germany, and Canada that rely on higher shares of wind would face higher balancing costs, but having said so, they can still achieve affordable, stable systems through smart policy and innovation.
Across many regions, long-distance transmission lines can also be one of the most cost-effective solutions to balance out supply and demand.
“Clean electricity is essential for climate action and is the most affordable way to power economic development. Countries can build resilient economies fit for the future by investing in renewables, grids, and flexibility now. Indeed it is their obligation to do so, according to the recent ICJ advisory opinion. Low-cost, clean power is what people, industry and businesses want.” said Christiana Figueres, Founding Partner of Global Optimism.
Next up, we must dig into how ETC’s report discovered that it is technically possible for wind- and solar-dominant systems to be stable and resilient with the right mix of balancing and grid technologies. In fact, these systems are no more likely to experience blackouts than thermal generation-dominated systems.
Another detail worth a mention relates to how high wind and solar systems can be competitive with today’s wholesale prices and grid costs. You see, sun belt countries could see costs more than halve to $30-$40/MWh by 2050. On the flipside, wind-dependent country costs are higher, but in the future could be comparable to current levels.
ETC report further revealed that “last mile” of decarbonization will be the most expensive. The same is particularly evident across countries that need ultra-long duration balancing to meet seasonal variations in supply and demand. This translates to how once countries have reached very low levels of carbon intensity (e.g., less than 50g per kWh), electrification will take up a more important role than rapid last-mile decarbonization.
“Multiple technologies, including nuclear and geothermal, may play a role in zero-carbon power systems. But wind and solar will be the dominant source of power in most countries, providing 70% or more of electricity at costs at or below today’s fossil-based systems. In particular, in the global sun belt, the collapsing cost of solar PV and batteries makes possible far cheaper and more rapid growth in green electricity supply than seemed feasible 10 years ago. But wind belt countries can also achieve cost-effective decarbonization by leading in offshore wind, long-duration storage, and grid innovation.” said Adair Turner, Chair of the Energy Transitions Commission.
Hold on, we still have a few bits left to unpack, considering we haven’t yet touched upon the fact that upto 30% of all global power demand could be time-shifted through demand-side flexibility, an objective which can be met on the back of dynamic pricing and the use of smart management technologies.
Rounding up highlights would be a piece of detail revealing how annual grid investment could rise from $370 billion in 2024, peaking at $870 billion in the 2030s. However, 35% of grid expansion costs can still be avoided between now and 2050 with innovative grid technologies.
