I can’t help but think of the World Future Energy Summit as a great big oily bubble: despite the fact that the work of companies of every conceivable variety is on display in the Exhibition, with the alternative energy paradigm (renewables, storage, efficiency etc) becoming more and more of a presence over the ten years of the Summit’s existence, few people seem to have any real sense of the massive substitution story that is already under way. The idea that the era of fossil fuels is already on an inexorable downward trajectory is rarely if ever mentioned; and the even more radical notion that it could come to an end far faster than most ‘oil and gas experts’ can even begin to imagine remains deeply heretical.
But the strange thing is that the hard-edged financial evidence of this inexorable transition is all around anyone attending the Summit. It’s ‘Daily News’ is full of information about new deals being done across the MENA region at ever lower prices, especially for large-scale solar and wind.
In November last year, for instance, a PPA was signed between the Dubai Electricity and Water Authority and Masdar (the Abu Dhabi future energy company) to provide 800MW of solar power (PV) at the Al Maktoum Solar Park. For an astonishing $29.90 per MWh – the cheapest solar power contract ever signed, and promising electricity at a far lower price (at $0.03 per kWh) than any other source.
In Abu Dhabi itself, there’s much talk of an equally significant project being negotiated (on behalf of the Abu Dhabi Electricity and Water Authority) at an even lower price – coming in possibly below $25 per MWh.
These record low prices are by no means the end of this particular story. The International Energy Agency has confirmed that renewables will be the fastest-growing source of electricity over the next few years (possibly indefinitely!), and IRENA (the International Renewable Energy Agency) is projecting that prices of PV could fall by a further 59% between now and 2025, Concentrating Solar Power by 43%, onshore wind by 26%, and offshore wind by 35%.
Factor in steadily increasing efficiencies and better reliability (meaning lower maintenance cost), and it’s now clear that in most countries, in most circumstances, renewables will need no subsidies whatsoever to outcompete any kind of fossil fuel generation. (And you can simply forget nuclear, which goes on getting more and more expensive.)
All of that, and more, is laid out, time after time, for anyone attending the World Future Energy Summit. Which appears to make all this climate-denying ‘co-existence’ rhetoric just so much moonshine – primarily on the part of companies and countries increasingly desperate to spin things out for as long as possible. Even the use of oil for transportation (which will be the slowest sector to transition) may already have reached a high point – depending primarily on the growth of electric vehicles in key markets such as the USA and China.