Renewables as the 21st century energy

As we navigate the energy transition, the economic advantages of renewable energies are becoming undeniable, especially when compared to fossil fuels – and I would (maybe boldly) say that this is like comparing 21^st and 19^th century-developed technologies. Both technology systems have very different economic and financial playbooks, with renewables typically requiring bigger capex, but then with considerable advantages when we look at operational costs at scale – I have seen figures that point out to less than half of fossil’s operational costs per MWh. It’s also worth noting that R&D focus on renewables has also been driving capex requirements down – and this is expected to keep on going for, at least, the next couple of decades. Renewables also offer long-term savings by eliminating fuel costs and reducing exposure to price volatility, while fostering energy independence.

 

Let’s not downplay fossil. Fossil fuels were instrumental in powering industrial growth during the 19th and 20^th centuries, and are a proven and tested technology, easy to implement and to run – and that probably plays a lot on the importance of coal on today’s energy grids (and, by the way, they are independent from the weather and day/night transitions). But their finite nature, higher operational costs, and reliance on volatile markets present significant challenges today (and I am leaving environmental external costs aside, on purpose). Renewables, on the other hand, are abundant (virtually infinite), with lower opex and aligned with modern economic priorities like energy security and electrification.

 

On the long-run, and at scale, it’s probable that fossil fuel-based economies will be facing a significant economic disadvantage when compared to the ones that combine renewable sources and smart-grids. What I am saying here is that it is foreseeable that products produced under fossil fuel-based systems will be naturally more expensive. And so, that economies that are not already transitioning to renewables (and that are trying to protect their fossil fuel systems through state sponsored initiatives) will probably be playing in an uneven (against them) field in the medium term.

 

Prioritizing renewable energy solutions is not only an environmental and quality of life imperative but a smarter economic choice for the future. The shift to 21st-century energy is here – so, let’s embrace it!