There's good news and gloomy news on climate change in this new report on renewable energy from Bloomberg New Energy Finance.
First, the celebratory stuff. Renewable energy — mostly wind and solar, plus a little geothermal and biomass — is growing at a record pace. Last year, the world's nations plunked down $286 billion on renewable energy, twice what they spent on coal and gas. For the first time ever, renewables made up fully half of all new electric capacity, with 118 gigawatts coming online. Next time someone scoffs that renewables are a niche market, toss them this PDF.
In all, renewable energy (excluding large hydropower dams) provided 10.3 percent of the world's electricity in 2015, up from 9.1 percent the year before:
Countries also added 22 gigawatts worth of large hydropower and 15 gigawatts of new nuclear last year. If you include hydro, renewables now provide 22 percent of the world's electricity. If you add in nuclear, the carbon-free total rises to 33 percent.
The growth in clean energy still isn't fast enough
So now comes the sour "yes, but..." This breakneck growth in clean energy isn't nearly fast enough to drive the sort of sharp CO2 reductions needed to tackle climate change. Not yet, at least.
For one, the world is still building lots of carbon-belching coal and natural gas plants. The fact that wind and solar remain relatively expensive and can't run 24/7 means there's ample demand for fossil-fuel generation.
Last year, the world added 43 gigawatts worth of coal capacity, on net, and 40 gigawatts worth of natural gas capacity. Because these coal and gas plants can run more often, they actually generated more electricity than all the new renewable facilities built in 2015.
As long as fossil fuel generation keeps expanding rather than shrinking, it'll be tough to push down global CO2 emissions. And this dynamic isn't set to change anytime soon. The report notes that few forecasters think CO2 emissions in the global power sector will peak before 2026. (A separate report from McKinsey & Company, meanwhile, predicts that coal and gas will still provide most of the world's electricity in 2040.)
Keep in mind, too, that this report mainly focuses on the electricity sector, which only accounts for 40 percent of energy-related CO2 emissions. If you really want to whip global warming, you'd also need to clean up transportation. Plus figure out what to do about cement, steel, and other industries. There are a few encouraging signs along those lines — the report notes that battery prices keep plunging and electric vehicle sales are expanding — but it's early days yet.
So this chart remains as relevant as ever:
Bottom line: There are some amazing things happening in renewable energy. Large sacks of money are being tossed around. Photovoltaic panels and wind turbines are going up at a frenetic pace. But we're still very far from solving this pesky climate change problem.
Five other neat charts from the renewables report
The full UN/BNEF report has dozens of interesting charts and graphs on renewable trends, but I'll just pull out five that grabbed me.
1) Forget Europe. The real renewable action is happening in China.
Note that investment in renewable energy has actually been declining in Europe since 2011. (See here for more on that crash.) But it's absolutely soaring in China, which spent more last year than Europe and North America combined.
2) Despite the oil price crash, electric vehicle sales are rising
Some 462,000 people bought electric vehicles last year, up 60 percent from the previous year, despite the fact that oil prices were plummeting. The US market has flatlined, but sales have been picking up in China and parts of Europe.
From the report: "Improvements in range, reductions in battery prices, and the availability of tax and other incentives have combined with increasing familiarity to propel sales forward."
The big question is how far electric vehicles can go. Bloomberg New Energy Finance has optimistically predicted that annual electric vehicle sales will rise to 2 million by 2020. Other forecasters have been less bullish. We'll see. But speaking of which...
3) Lithium-ion batteries keep getting cheaper and cheaper
The only way for electric cars to compete with conventional vehicles on price is for batteries to get much cheaper. So it's excellent news that lithium-ion battery prices fell 35 percent last year. But some analysts argue they have to keep falling further still — to $150/kwh or lower — for electric cars to become truly mainstream.
4) Energy storage is booming, especially in the United States
For solar and wind to expand beyond a modest fraction, they'll likely need to be paired with grid-scale storage to overcome their intermittency issues. This is starting to happen, although there's a long way to go.
Last year, the world installed some 250 megawatts worth of new storage technologies (i.e., excluding pumped hydro and older lead-acid batteries), mainly in North America. Cheaper lithium-ion batteries are offering utilities more options here.
5) But fossil fuels are still cheaper than renewables+storage
That said, cost remains an issue for renewables. This chart shows the levelized cost of electricity for various energy technologies across different countries.
As you can see, wind electricity alone has already become cheaper than coal and gas in many places. And solar photovoltaics have been making stunning gains, with the price dropping by nearly two-thirds since 2009. In China and Germany, solar now beats natural gas.
But, again, wind and solar will likely need to be paired with storage in order to dominate in the long run. And, as the chart shows, wind+storage is still more expensive than fossil fuels everywhere. Solar+storage is even pricier. Getting those storage costs down will be crucial for renewable energy to become a major power source.
Further reading: Have we hit "the end of the fossil fuel era"? Not even close.