But the transition doesn’t have to be scary.
Renewables have grown powerful enough to alter the workings of power markets, which will in turn affect the future growth of wind and solar.
This unprecedented collision course creates uncertainty for the markets, but also opportunity, according to the combined insights of GTM Research, Wood Mackenzie and MAKE Consulting. The key will be thinking through the unintended consequences of the wind and solar acceleration and adjusting behavior accordingly.
Renewables already compete on price with conventional generation
Wind already beats coal and combined cycle gas plants on levelized cost of energy. That number is expected to drop another 12.7 percent over the next five years, while solar costs sink 31.5 percent.
“Renewables have become so much more competitive versus traditional fossil-fuel generation sources in the United States,” said Dan Shreve, head of Americas at MAKE Consulting, in the opening address of the Power and Renewables summit in Austin, Texas. “With all the gains that have been made over the last decade, there’s still more to come.”