Why existing fossil fuel generation is on the way out
Published in
2 min readJan 17, 2018
- The current method of electrical generation generates excessive volumes of greenhouse gas emissions that have offset the amount of naturally sequestered greenhouse gases in the atmosphere. This will cause the Earth’s climate to drastically change due to the fact that the total tonnage of these gases being added are quite large. This is probably not the kind of change humans want. This change in climate will cause events like destruction of environments on the crust that humans and nature find essential, mass migrations and in turn violence and acceleration of green house emissions from natural sources further accelerating the change in climate.
- In order to shift away from traditional methods of electrical generation, the price and risk of investment for installation of renewable forms of generation need to be at the same or even lower than high emission methods of generation. Otherwise, while subsidies can maintain installations for the short and medium term, long term the cost of generation will catch up and electricity will potentially become unaffordable. Basically, all of us in the renewable energy industry may be wasting our time if we don’t accomplish this. Subsidies currently in place include not only incentives to install new generation but also the cost to utilities of handling the variable generation of the introduced sources of power such as wind or solar.
- While what’s referred to as the soft and hard costs of solar PV have come down drastically due to the massive reduction in manufacturing cost, installation, engineering and sales efficiency, the cost of finance remains relatively high, especially in certain regions. The cost of finance makes up a significant portion of the total costs. In addition, financial institutions remain wary of investing in solar installations without very large returns due to the investment risk as well as taking advantage of their position as the major sources of capital.
- The pool of investment funds available for solar remains limited due to the nature of the investment in the eyes of the existing financial system. This means higher cost of capital and less likelihood of being funded in a timely manner or at all. Access to quick capital has a drastic effect on the success rate of sales in this industry; improving the availability of low cost and quick capital would have an positive effect on the ability of solar installation firms to breach the electric generation industry and allow for low greenhouse gas emission generation to become a primary source of electricity.
