Low Carbon Technologies Now Cost-Competitive With Fossil Fuels, Concludes Lloyd’s Register
A new report by Lloyd’s Register has concluded that low carbon technologies are now cost-competitive with fossil fuels, and that low carbon innovation is gaining pace across the sector.
In its third Technology Radar research report, published this month, technical and business services company Lloyd’s Register revealed the results of a survey of more than 500 professionals and experts across the low carbon sector. Of the 583 total respondents, 154 identified themselves as working in the nuclear sector, and 323 as operating in the renewables sector. The report, which in its previous iterations focused on the oil and gas sector, this time turned its attention to the low carbon sector, explaining that “We recognise and welcome the building momentum around the global decarbonisation agenda — and the contribution Lloyd’s Register can make.”
Specifically, the survey asked respondents to rate low carbon technologies in terms of their perceived potential impact, the amount of time it would take for the technologies to reach the market, and how likely the technologies are to be adopted once they do reach the market.
This is what makes this sort of report interesting. While we have seen repeatedly over the last year the way in which low carbon technologies such as wind and solar have fallen in price to become cost competitive with fossil fuel-generating technologies, reports such as the one from Lloyd’s Register bring in the added element of expert opinion and predictions. The report also points to ever-changing landscape of renewable energy technologies, noting that “Renewable energy sources, particularly solar and wind, have achieved vast efficiency improvements in recent years — enough to compete with fossil fuels and, in an increasing number of cases, reach grid parity.”
“We are very encouraged by the findings, which highlight not only a growing optimism across the industry but a vigorous and intelligent debate about the pathways to decarbonisation,” said Alasdair Buchanan, Energy Director of Lloyd’s Register. “Clearly, there are many uncertainties about exactly how the industry will evolve, but what is inarguable is that the conversation is no longer about “should we?” but “how should we do it?””
The key highlights from the report are as follows, and mimic a lot of what we have already seen over the past few years:
- Low carbon generation technologies are cost competitive. Nuclear is one of the cheapest options for power generation when lifecycle costs are taken into account. 70% of survey respondents say that renewables are now reaching cost parity with fossil fuels.
- Solar cell technology is likely to have a major impact, and soon. Renewables respondents are most optimistic about the potential of advances in solar cell technology — and the likelihood of adoption.
- The potential contribution of Small Modular Reactors (SMRs) is unclear at this stage, although its impact will most likely apply to smaller grids and isolated markets. However, the underlying modularization technology is expected to have a major impact on the sector.
- Nuclear will continue be part of the solution to climate change long into the future. Although public acceptance is a major challenge in some countries, nuclear is likely to contribute to the energy mix for the foreseeable future.
- Software advances will be instrumental in transmission and distribution. They are seen by respondents as the innovation that will be the quickest to arrive and the most likely to be adopted. Blockchain could reshape the way we think about the transmission and distribution of power by enabling a new era of peer-to-peer low carbon generation.
- It is electrical technologies that will transform storage, rather than mechanical storage or chemical technology innovations. In particular, respondents expect supercapacitors, which will rapidly speed up charging times for large batteries, to have the greatest impact on storage.
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