Renewables Are Too Cheap to Fail

Renewable energy has encountered a strange crossroads – it is more successful, and also more divisive, than ever before. Wind and solar have become so successful that they’re not really alternative anymore – they’ve fully entered the mainstream. Not only have renewables outgrown subsidies and become independently successful, they’ve become so cheap that they are the most logical choice for new energy installations even in the poorest country contexts. But their development and deployment has become so politicized that even as the hand of the market pushes their expansion forward, talking about that expansion has become a sort of taboo.

“Over the past three decades, advances in technology and a maturing development ecosystem have made renewable energy projects more economical, less risky, and increasingly rewarding for landowners,” reads a recent Yale Insights article. “Yet as the industry has grown more mainstream, it has also become more politicized, adding new challenges to an otherwise thriving sector.”

The sticky partisan quagmire in Congress is creating major roadblocks for the greenlighting of new clean energy projects in the United States – the world’s biggest economy and second-biggest greenhouse gas emitter. This doesn’t just pose a problem for the climate cause – it’s also a significant hurdle for energy security in an era of skyrocketing energy demand. On the back of the AI boom, private and public interests are increasingly adopting an ‘all-of-the-above’ approach to energy production in order to keep pace with demand trends. Any roadblocks for clean energy are therefore a potential roadblock to grid stability going forward.

“We need to figure out how to make more electricity, how to make it [as] environmentally benign as possible, and how to get that electricity to where it’s needed,” Reid Buckley, a partner at Orion Renewable Energy Group, told Yale Insights. “That doesn’t mean that every energy project should be approved, but a Democratic-versus-Republican framing doesn’t help in making good decisions.”

However, experts are increasingly finding that the squabbling in Washington and the rollback of clean energy permitting and supports across the United States are ultimately no match for the march of progress. Clean energy is simply too cheap and too available for the U.S.’s policy inertia to make a dent in global energy trends. In the lead-up to the UN’s COP30 climate conference, taking place now in Brazil (without high-level U.S. representation for the first time in the event’s three-decade history) two different high-profile reports looked into this issue. Both reports, one by research nonprofit Rhodium Group and the other by the UN Environment Programme, found that global emissions outlooks are much the same as they were under the Biden administration.

“Trump administration actions like withdrawing the US from [the Paris climate accord] and pulling back clean energy tax credits are being offset by the plummeting cost of renewables and the continuation of climate policies in other countries,” reports the non-partisan news outlet Semafor. Indeed, solar and wind have become so cheap and available that many developing countries — including some of the world’s poorest — are electrifying at an unprecedented pace. According to Yale Environment 360, around 63 percent of emerging markets in Africa, Asia, and Latin America are now sourcing more of their power generation from solar than the United States. Countries including Brazil, Chile, El Salvador, Morocco, Kenya, and Namibia have now overtaken the world’s largest economy in their clean energy transitions.

Unfortunately, despite this continued global progress, we are still not on track with climate goals – both reports project that we will likely reach 2.8 degrees Celsius over pre-industrial averages by 2100 – a devastating finding far out of range with the goals set in the Paris agreement. And while current politics are not make-or-break for those outcomes, they do matter. As the International Energy Agency director Fatih Birol has expressed, “the age of electricity is here, but dark geopolitical shadow looms over [the] energy sector.”

By Haley Zaremba for Oilprice.com

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