Global energy market will reach grid parity within next 5 years

Analysts believe that the low price of fossil may persist for several years, but this fact does not give them advantages over alternative energy, especially solar.

According to Alex Tёrtsbi, executive director of the National Bank of Abu Dhabi, technologies of alternative energy have passed the road, which is hard to believe. In particular, new records are placed in the field of solar energy and wind energy. And thanks to the fact that in recent years the cost of these technologies has been significantly reduced, in many parts of the world alternative energy competes with conventional fuels.

Over the past few years more than 50% of all investment in electricity generation were accounted for alternative sources of energy, and the total investment in alternative energy was about 260 billion dollars annually for the past five years.

This led to the fact that the cost of solar power has fallen by 80% compared with 2008, and the volume of production of wind power has become 15 times more than in the 90s of the last century.

Analysts of Deutsche Bank also make optimistic forecasts for the development of alternative energy. They attribute this to the fact that prices for consumers are growing, despite the drop in energy prices. In particular, the average price of natural gas, the main raw material for electricity generation over the last 10 years has fallen by 86% and electricity tariffs increased by 20%.

The fall in coal prices also have an impact on the development of alternative energy, and in fact for about 17% of American mines are on the line of profitability or threatened with closure because they are unable to cover their operating and capital costs.

In connection with this situation, many countries expressed the need to achieve grid parity by increasing solar capacity. In particular, China, which produces about 70% of its electricity using coal, claim about the course to increasing of its photovoltaic capacity, and in the last year it has reduced coal production by 3%.

Analysts believe that in the near future without subsidies costs for producing solar electricity will be about 0.08 - $ 0.13, which is 30-40 percent below than retail prices in most markets of the world. In places where electricity production depends on coal production, the ratio of the value of the "traditional" kilowatt to the "sun" in the four year level decreased from 7: 1 to 2: 1 and in the next 18 months will reach parity, because the cost of solar panels continues to decline. In the next 5 years, falling prices for such systems can be up to 40%.

A finally step on the road to solar power may be the development of technology accumulation of electricity. As the analysts of Deutsche Bank claimed, solar panels, combined with the technology accumulation significantly accelerate the global deployment of renewable energy.