Article by: Pornphimol Winyuchakrit (Ph.D.)
Sustainable Energy and Low Carbon Research Unit
Sirindhorn International Institute of Technology, Thammasat University
Rapid decline in cost of energy production from RE technology is a key accelerator in the energy transition. In 2014, cost of electricity generation from wind was 0.11 dollars per kilowatt-hour ($/kWh) while the cost from solar was 0.17 $/kWh. However, in 2017, the International Renewable Energy Agency (IRENA) reported that the global average costs of electricity generation from onshore wind and solar were 0.05 and 0.06 $/kWh , respectively. Moreover, the cost of electricity generation from wind was expected to be 0.04 $/kWh in 2020.
The figure below shows the historical shares and changes of energy consumption form various energy resources. It indicates that coal had been a major resource during the 19th century and decreased after that, resulting from replaced oil and gas. Nevertheless, during the last decade, RE demand, especially from wind, hydro and solar was rapid and continuous growth while oil and gas demand decreased. BP Energy Outlook reported that electricity generation from RE has grown faster than the others. It was expected that share of electricity generation form RE would be 14 percent of overall generation, and electricity generation from solar would be increased 150 percent, compare to its level in 2015.
Historical Shares and Changes of Global Energy Resources
Regarding to the above information, there is a significant indication that rapid energy transition is an important factor affecting on the structure of global energy market, especially the impacts on oil and gas companies and exporting countries. Both are in the face enormous challenges in disruption and maintenance of their existing business structure. That brings into the question that “How can oil and gas businesses continue to survive in this rapid global energy changes?”. Therefore, understanding the changing pattern of energy technology is extremely important to business restructuring and investment opportunity in the future.
On the other hand, reduction of energy production cost is a good opportunity for consumers to become prosumers, thus an all-round study on energy technology can help to support the future investment decision.