Some of the most common questions in advanced energy revolve around the challenges related to cost, feasibility, and progress. Can we afford the technology, and if not, when will the technology become affordable? What will drive the transition into the renewable energy world? At Moye White’s Advanced Energy Group’s event, “The Renewable Revolution: The Future is Here,” industry expert and RMI strategist, Kingsmill Bond explained why this is a pivotal decade in the energy transition and broke down obstacle and opportunities including technology costs and barriers to entry, who is leading this energy revolution, and opportunities created with potential implications in this rapidly changing market. Here are the takeaways.
We are in the middle of an energy technology revolution.
Renewable technologies enjoy learning curves and exponential growth, which has already led to a reduction in fossil fuel demand. The growth of new energy technologies has been so fast that we hit the peak for fossil fuel demand in 2019. We now see fossil fuel bouncing along a plateau, and the prediction is that this plateau will end around 2025 and then fossil fuel demand will go into terminal decline. Of course, there are many barriers to this change; however, with continued support from technology, policy, finance and societal attitudes, those barriers are solvable. This is the decade of change and market strategists expect to see solar and EV start to dominate the sector sales by 2030.
The U.S. is in the middle of a race to the top.
China, as the workshop of the world, is currently leading in the implementation of renewable technologies based on the competitive advantage they currently hold, but the West is waking up to the opportunities of the renewable technologies and has sparked a global race to the top. The Inflation Reduction Act (IRA), which passed in 2022, aims to curb inflation, by possibly reducing the federal budget deficit, lowering prescription drugs, and most importantly as it relates to this conversation, investing into domestic energy production while promoting clean energy. The IRA provides new and reinstated tax laws that benefit individuals and businesses through home energy credits, clean vehicle credits and tax law changes for businesses. The IRA helps put the U.S. back in this race. Bear in mind, many countries in the global south are also taking advantage of new technologies to leapfrog ahead. For example, India has made renewables central to its drive for development, and Vietnam overtook the U.S. in solar electricity generation.
Part of this revolution is led also by the increased national security the renewable technology offers to countries that are not energy independent.
The advanced energy revolution will play out faster than you think.
Renewable energy technologies are small and modular and enjoy learning curves, which will lead to renewable costs to continue falling. Policy action will continue to evolve and progress. Manufacturing capacity is already increasing and according to the International Energy Agency planned solar capacity is already at a point to produce more than 1,000 GW by 2030. Renewables and electrification drive efficiency up an S-curve, creating a scenario where efficiency gains could overtake GDP growth leading to peak primary energy demand. All of this leads to incredible momentum for advanced energy and that momentum will continue to grow as each new challenge is solved and countries continue to race to the top.
The projected implications of the advanced energy revolution.
Kingsmill Bond projects that we will see solar sales likely quadruple and wind double, with the rise of a new electrolyzer market. The rising efficiency driven by the renewable energy S curves will continue to squeeze fossil fuel demand. This ultimately will lead to companies transitioning from tactical responses like ESG, CCS, and carbon footprinting to strategic responses related to the business specific advantages to renewable technology.
Kingsmill Bond is a Strategist and Senior Principal on RMI’s Strategy Team who researches and writes on the energy transition narrative, with a focus on financial market participants. You can learn more about Kingsmill Bond and read his other authored works at https://rmi.org/people/kingsmill-bond/.
Attorney Kole Kelley practices in Moye White’s Advanced Energy and Real Estate Practice Groups. In his practice, he advises advanced energy companies and landowners on matters involving leasing, regulatory compliance, and real estate matters related to natural resources and navigating federal, state, and local permitting processes. He can be reached at email@example.com.
What is written here is for general information only and should not be taken as legal advice. If legal advice is needed, please consult an attorney.