At an unprecedented pace, the green energy market is increasing. For the first time in 2020, renewables have produced more energy in the United Kingdom. Solar energy is the “least expensive electricity in history.” than fossil fuels, according to the International Energy Agency. But, although the renewable energy market’s potential is expanding, renewables only contribute just 11% of the globe’s primary energy. This is only twice the proportion given by renewables over 50 years earlier. The switch to renewables’ speed needs to be increased, with the United Nations anticipating an overshoot of goals of the Paris Agreement 2030, close to 32 billion metric tons of Carbon dioxide.
Several hurdles have delayed the green energy transformation. For years, economic hurdles have included non-renewable energy incentives, low oil prices, which have reduced investment in renewable energy, and infrastructure construction costs. External obstacles, including civic concerns over improvements to urban environments and disturbances to existing ways of life, have also limited development. International demand and recognition of the detrimental impacts of electricity generated from fossil fuels are catalyzing political policy to decarbonize the energy market. However, these obstacles are enduring. For example, the EU’s European Green Agreement lays out a roadmap for net-zero emissions of greenhouse gases by the year 2050, and China is taking action to reach carbon neutrality by the year 2060. Renewables are attracting new funding, with politicians setting a path for transition.
In October, the Financial Times reported that stocks of hydrogen power equipment maker ITM Power had increased by 220%, while Dutch energy storage firm Alfen leaped by over 230%. In the meantime, in terms of stock market valuation, the Florida-based “clean energy” supplier NextEra Energy has overtaken the global oil and gas firm ExxonMobil, which once held the world’s highest share value.
Some major oil firms are now making investments in renewables. Total has agreed to a big solar plant in Qatar, while ENI SpA has vowed to reduce the emissions by 80% by 2050. Mercuria, a Swiss commodity trader, is now spending $1.5 billion with private equity investors in North American renewable energy ventures. And the decision of BP to write down properties worth about $17.5 billion on the grounds that they were “no longer economical” may be a turning point in the energy sector.
Despite these major strides forward, though, there is a fundamental technological barrier: energy storage. Chief executive of Aceleron, Amrit Chandan, a lithium-ion battery tech firm, observes: “Renewables are sporadic, implying that they will need the assistance of batteries to preserve clean energy to be used when the sun is not shining as well as the wind is not blowing. Battery technology is vital.”