Switching to renewable energy could save the world at least £10.2trn compared to continuing current levels of fossil fuel use, according to a major study.
Empirically grounded technology forecasts and the energy transition, an analysis of energy costs over several decades by Oxford University researchers, says that a fast transition to clean energy would be cheaper than a slow transition or no transition at all, and branded the idea that going green is expensive as “just wrong”. Green technology costs have fallen significantly during the past decade and are likely to continue falling, it adds.
The researchers analysed thousands of transition cost scenarios produced by major energy models and data from 45 years of solar energy costs, 37 years of wind energy costs and 25 years of battery storage costs. They found that the real cost of solar energy dropped twice as fast as the models’ most ambitious projections, revealing that, during the past 20 years, previous models had badly overestimated the future costs of key clean energy technologies versus reality.
The study’s ‘fast transition’ scenario shows a realistic possible future for a fossil-free energy system by around 2050 that provides 55% more energy services globally than today. This would be realised by ramping up solar, wind, batteries, electric vehicles and clean fuels such as green hydrogen.
“Past models predicting high costs for transitioning to zero carbon energy have deterred companies from investing, and made governments nervous about setting policies that will accelerate the energy transition and cut reliance on fossil fuels, says Rupert Way, postdoctoral research at the Smith School of Enterprise and the Environment. “But clean energy costs have fallen sharply over the last decade, much faster than those models expected.
“Scaling-up key green technologies will continue to drive their costs down, and the faster we go, the more we will save. Accelerating the transition to renewable energy is now the best bet, not just for the planet, but for energy costs too.”
The study shows that the costs for key storage technologies, such as batteries and hydrogen electrolysis, are also likely to fall dramatically. Meanwhile, the costs of nuclear have consistently increased during the past five decades, making it highly unlikely to be cost competitive as renewable and storage costs plunge.
“There is a pervasive misconception that switching to clean, green energy will be painful, costly and mean sacrifices for us all – but that’s just wrong,” says Professor Doyne Farmer, who led the team behind the study at the Institute for New Economic Thinking. “Renewable costs have been trending down for decades. They are already cheaper than fossil fuels in many situations, and our research shows they will become cheaper than fossil fuels across almost all applications in the years to come.
“If we accelerate the transition, they will become cheaper faster. Completely replacing fossil fuels with clean energy by 2050 will save us trillions.”