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The Hill logo Coronavirus accelerates global shift to cheaper, more sustainable renewable energy
To paraphrase a famous "anchorman," that de-escalated quickly.
Coronavirus accelerates global shift to cheaper, more sustainable renewable energy © Getty Images Coronavirus accelerates global shift to cheaper, more sustainable renewable energy
Coal suffered a historic drop in usage last year. Buyers paid producers as much as $37 per barrel of crude oil in April. The price of plastics has fallen by roughly half over the last four years.
The fossil fuel economy, which motored happily through one century, is quickly running out of steam. Gas, once considered a viable option to bridge the transition from "dirty" fossil fuels - such as coal and oil - to renewable energy, is now more likely to serve as the end of the fossil fuel era rather than the beginning of the renewable energy age.
Originally hailed as a boon both for U.S. exporters and Asian economies, liquefied natural gas (LNG) prices have hit a 10-year low. Texas energy companies have found it's cheaper to burn $750 million worth of gas than to try selling it. Also, the company that pioneered gas fracking, Chesapeake Energy Corp., filed for bankruptcy protection earlier this week.
Neither the oil nor gas industry's woes are new. But the coronavirus pandemic, which is expected to shave roughly $8 trillion from the U.S. economy over the next decade, has thrown the troubles of the energy industry into high relief, forcing companies and investors to face reality and turn toward renewables. Evidence that renewable energy and storage sectors reached a milestone was clear this May: a record-low solar tariff of $13.50 per megawatt-hour (MWh) was awarded in Abu Dhabi, which is 13 percent below the previous global record; the New Mexico Public Regulation Commission approved 100 megawatts of solar generation and 50 megawatts of dispatchable battery storage for $30 per MWh; California awarded seven projects totaling 770MW of battery storage; two mega-renewable hydrogen projects worth a total of $5 billion were reported in China; and more.
Through the middle of June, U.S. wind turbines, solar panels and dams had produced more electricity than coal on 90 separate days, demolishing the previous year's record.
Momentum for renewables continued through June, when utilities in Arizona, Colorado and Florida announced plans to close coal-fired plants and replace them with renewable sources, without using any gas-fired plants as a "bridge" fuel.