Investments made in renewables worldwide in 2015 have reached a record amount of $ 329 bn. For the first time, they were higher than investments made in the oil and gas sectors, the latter having obviously dropped along the oil price which lost 50 % in 2015 and 75 % since its 2008 peak… very far from the forecast of Goldman Sachs’ farseeing analyst who had then announced the imminence of a $ 200 barrel!
This record amount of investments in renewables mostly proves that they became competitive, even in the context of low fossil fuels price.
The feed-in tariffs and/or tax credits, necessary to the onset of a sector, are overall replaced by procedures such as calls for tender. The resulting market prices demonstrate the amazing progress achieved by companies in a sector which is becoming mature.
According to Bloomberg News Energy Finance, the cost (LCOE) of wind power has dropped by 50 % since 2009, the cost of photovoltaic modules by 80 % since 2008; Enel just won a windpower project in Morocco at $ 30/MWh and a photovoltaic project in Mexico at $ 36 MWh.
By contrast, since 2007, estimates for the cost and the construction duration of Flamanville EPR have increase threefold; the selling electricity price of the future Hinkley Point EPR will be of € 109/MWh.
There is no doubt that this English project will be launched, given its multifaceted equation: technical, political, strategic, social, psychological… of which the solution is certainly not basic and most likely not rational.
Unfortunately one might be afraid that the French taxpayer will not escape unharmed! It is of some solace to note that even before exporting the EPR to our neighbors, we are exporting the debate it sparks. We mostly regret that this debate does not provide the opportunity to smash the lasting misconception that renewables are not competitive.
Renewables did become competitive.
« Competitive but intermittent, non competitive when taking into account the storage cost to manage intermittence”. Obviously. Under the triple assumption that a relevant mix of intermittent and non intermittent mix cannot be built, that the storage cost will not benefit from technical progress and economies of scale, that one is not able to put further intelligence in the supply and demand management. Obviously.
In addition, the fact that despite the global growth environment, Europe has reduced its investments in renewables. Therefore its market share decreases today. Its competitiveness will be certainly impacted tomorrow. There is nothing that can enable us to increase our underground fossil fuels reserves, this is a geological fact of which stems our dependency vis-à-vis third producers countries. There is nothing that obligates us to maintain this dependency abandoning to others a technological and industrial leadership.
Albert Einstein said, « it is easier to smash an atom than a prejudice”.
May we add that « it is easier, but more expensive! ».
Stéphane Villecroze, with the cooperation of Sophie Paturle and Lionel Cormier
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