SIEW 2014: Understanding the true cost of renewable energy

Michael Taylor of IRENA speaks at SIEW 2014, saying growth in the renewable energy sector has brought about side-benefits like the creation of 6.5 million jobs in 2013.

Dr Arif Sayed of Bureau of Resources Energy Economics (BREE) shared that “Information availability is not consistent among some of the countries, while speaking at the IRENA Renewables Roundtable at SIEW 2014.

By Kevin Goh

Renewable energy offers benefits ranging from job creation to lower demand for fossil fuels but estimating its true cost can be hampered by variations and inconsistencies in data between regions and countries, experts said on Thursday in a roundtable discussion at Singapore International Energy Week 2014.

The main drivers for renewable energy include the growth in the urban middle class, rising electricity demand in developing countries and concerns about the environment and climate change, they said, noting that transparent information about the costs is a major factor influencing investors.

“Absence of up-to-date data is a barrier,” said Michael Taylor, a senior analyst at the International Renewable Energy Agency (IRENA).

Taylor said growth in the renewable energy sector created 6.5 million jobs in 2013, has cut health costs by about US$200 billion and led to a drop in demand for oil and natural gas of about 15 percent.

But various studies about the cost of renewables have faced similar issues with inconsistent data.

“Information availability is not consistent among some of the countries, such as capacity factors, utilisation rates, O and M (operation and maintenance) cost and discount rates,” said Arif Sayed of the Bureau of Resources Energy Economics in Australia

A solar photovoltaic facility consists of both fixed capital and installation costs. Despite studies by IRENA showing that the cost is still significantly higher than hydro power and wind power, Taylor said it has been dropping rapidly due to higher learning rates and lower installation costs.

But there have been significant variations in IRENA estimates for the cost of solar photovoltaic between China, India and parts of Southeast Asia, which Taylor said were likely due to geographical constraints where installations may have to be located further from the grid to maximise capacity utilisation.

With the collection of more and better data, he said, it is time to deepen the analysis and share the findings with the industry.

About Singapore International Energy Week (www.siew.gov.sg)

The 7th annual SIEW 2014 is the foremost platform for top policymakers, energy practitioners and commentators to discuss energy issues, strategies and solutions. SIEW brings together a robust line-up of world's leading conferences, exhibitions, roundtables and networking events to provide insights and perspectives on the emerging trends and innovations across the energy spectrum of oil & gas, clean and renewable energy, and energy infrastructure financing – in one week, one location. Please visit www.siew.gov.sg for further information.