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Renewable energy

To see the future of renewable energy, look to the EU

It wasn’t very long ago that renewable energy was seen as a nice idea, but not a power source to be taken seriously. It’s quite a different story today, with both demand and production capability for renewable energy increasing across much of the world.

That being said, renewable energy will still face a few obstacles if it is to overtake fossil fuels as the world’s primary source of power generation.

Renewables rise

When modern ideas of renewable energy entered the public consciousness in the 1970s, they seemed quite far from becoming reality. In the decades since, significant progress has been made.

The cost of solar panels, for example, has decreased by 99 percent since the 1970s, according to information from the International Energy Agency, and onshore wind power cost has dropped 96 percent. This is due largely to technological advancement and government support through pro-renewable policies and regulations.

Public support for renewable energy has increased as well, both in terms of volume and intensity.

Challenges for renewables

As the renewable energy sector continues to grow, it will need to overcome at least two significant hurdles:

Cannibalization: As societies explore the various ways to generate renewable energy, some technologies will overcome others. That renewable energy can be produced at a lower cost than power from traditional sources means there’s less revenue to be made; as a consequence, some renewable energy companies will be starved out of the industry.

Inflexibility: One of the earliest doubts about renewable energy still has not been definitely addressed: How can we effectively manage fluctuating sources of power? Wind and solar energy, for example, are not viable in places where the sun shines erratically or the wind isn’t consistent. Furthermore, storing wind- and solar-generated power and transporting it from where it’s generated to where it will be used has not become much easier.

Chart: Share of renewable power in selected Northern European Countries by percent.

To see the future, look to the EU

The story of renewable energy isn’t anywhere near done being written, but the EU may hold some clues as to what plot developments we might see. European countries have heavily subsidized renewable energy, so its share of the power mix has increased over the past 10 years or so. As those subsidies wear off, however, renewable energy will have to fend for itself on a less-advantageous playing field. As technology advances, it’s possible improvements in transportability might, too.

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