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Successful market and price development of renewable energy

Myth

Renewables are too expensive. The renewable energy market is just a protected area which is not competitive and cost effective enough to survive in a free market.

Facts

Existing support programmes such as the German EEG (Renewable Energy Law) have improved renewable energy technologies. Market forecasts for wind energy have increased fivefold since 2005, and even 14-fold in the same period for the photovoltaic sector. Globally, the levelized costs of energy have significantly decreased in the last few years.

Renewables have taken the lead in newly installed power capacities

Development of the renewable energy share in global electricity supply since 2007

Source: Bloomberg New Energy Finance based on UNEP 2016

The development of renewable energy exceeds all expectations. 147 gigawatts (GW) of power capacity based on renewable energy was newly installed in 2015 – more than ever before. In the heating sector 38 GWth (thermal) were additionally installed in 2015. In a period of low prices for coal, oil and gas and still-effective subsidies for fossil energy use, the market development especially for wind and solar power is astonishing. The global success has an effect on job markets too. 8.1 million employees are working in the renewable energy sector.

The cost development of renewable energy is remarkable – especially in the electricity sector. Thanks to technological development, economies of scale and an impressive learning curve, costs fell significantly, especially for wind and solar power. Support regimes such as the German EEG contributed to lower costs by providing a large global market for new clean energy technologies. In many markets renewable energy technologies can produce electricity at lower costs than fossil and nuclear power plants, even without taking into account the non-internalisation of external costs for environmental, health and other damage.