There are a lot of reasons why renewable energy is reducing the cost of electricity:
More Stable Cost; Renewable energy will help taking control over the energy costs; We know what will be the cost of the energy produced by wind farms or PV plants next year, in 5 years, in 10 years, because the cost of fuel will be zero and then not subject to inflation. The cost of producing renewable energy depends on the amount of money spent for the construction of the infrastructures and the cost to operate them, and this is known.
Less expensive power plants; Renewable energy will help reducing whole sale energy costs as they replace more expensive production in the electricity market.
Creating jobs; Renewable energy creates jobs for the country. A study by the UK Energy Research Centre (UKERC) taking data from the US, Europe, and China, suggests green energy could provide a boost to employment, through both short term construction jobs and lifetime plant jobs. The study looked at job impacts from renewable energy or energy efficiency policies and found that solar electricity creates between 0.4 and 1.1 jobs per gigawatt hour of electricity generated, compared to the 0.1 to 0.2 jobs created by coal and gas power. Meanwhile, wind energy is found to generate between 0.05 and 0.5 jobs per GWh generated, and energy efficiency policies result in between 0.3 and one job per GWh saved.
More flexibility, less costs; The advent of new technologies, such as storage, smart grids, along with the demand side response will help shifting production and demand peaks, track and manage energy use patterns, and group producers together to create virtual power plants, making the production of energy more flexible and the consumption more wise, helping to reduce the cost further
Reduction of infrastructures costs; Renewable energy along with storage capabilities will reduce or defer or avoid entirely the reinforcement cost of electric power transmission and distribution networks which for decades have been designed on peaks. Storage can provide an alternative way to increase network capacity and improve asset utilization. Storage reduces peak demand that the infrastructures (cables, transformers, …) need to supply, which is achieved by using the storage to absorb energy at low -demand times, and injecting it back at peak times will help.
The electricity sector is currently undergoing its biggest transformation for over half a century. Renewable energy as a whole is getting cheaper as it gets to scale and it is on his way to become even more successful with the advent of storage systems. Energy storage is going to be an important part of the energy generation and distribution system of the next decades, helping to smooth out the intermittency of renewable generation systems, increasing the inertia and stability of the grids, ensuring smooth supply, and finally helping to reduce the costs further.
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