Decarbonisation Technology - February 2022 Issue

wind and solar costs have fallen so far that they are increasingly competitive with other generation sources even when they are combined with battery storage. Nevertheless, a perception persists among many in the public that solar and wind are too expensive, or that they are only competitive with conventional generation plants because of government incentives, such as tax credits. However, a recent comparison of the levelised cost of energy (LCOE) or electricity for wind and solar plants to electricity from conventional sources such as natural gas and coal-fired power plants shows renewables beating coal virtually all of the time (see Figure 4 ), and competing very well with natural gas-fired generation. This is sometimes the case even without tax credits, which is labelled ‘unsubsidised’. Moreover, costs continue to fall, so increasingly even building new wind or solar plants with energy storage is cheaper than building a coal-fired plant. Addressing disaster vulnerability Just 7% of survey respondents rated protecting wind, solar, and storage assets from natural and manmade disasters in the number one spot, and 18% rated it in the top three of the five challenges listed in Figure 1 . Renewables have sometimes come under public scrutiny after severe weather-driven power outages, sometimes accompanied by misperceptions about their vulnerability. But more than two in three of our industry respondents (68%) said that wind and solar plants are no more vulnerable to extreme weather than other types of power generation plants. In fact, nearly all types of generation can be impacted by storms, extreme temperatures, and other natural disasters. And weatherisation to reduce this vulnerability can often be economically justified and should be evaluated, regardless of the type of generation plant. Other ways to also help ensure against weather-related outages and provide resilience can include diversifying energy sources; expanding interregional connections; and adding DER such as on-site solar, battery storage, microgrids, and demand response programmes. Another perception has been that renewable assets may be more vulnerable to cyberattacks than other assets. But in reality, almost all assets face the risk of cyberattacks and require cyber

risk management. While agreeing that increasing the number of assets connected to the grid may boost vulnerability by expanding the cyberattack surface, the risk applies across almost all assets. Eighty per cent of survey respondents said it is not clear that wind and solar assets add any more vulnerability to cyberattacks than other types of assets. Managing supply chain constraints Although supply chain constraints have been in the news recently, none of the power and utility executives surveyed rated this as the number one challenge. However, 11% rated it in the top three of the five listed in Figure 1 . A commonly discussed concern is that renewable energy, battery storage, and EV growth could be hampered by supply chain disruptions – from manufactured components to critical minerals. And there is cause for concern because constraints on manufactured components, key materials, and critical mineral supply chains are real and can potentially slow renewables growth, at least temporarily. Most clean energy components are manufactured abroad, with the US most exposed in the solar, battery storage, and wind sectors. And the pandemic and recovery have brought additional supply chain challenges. But industry and governments are exploring and implementing longer term solutions to address longer term post-pandemic constraints, such as developing domestic manufacturing and mining, working to secure additional supplies, recycling materials, and changing designs to limit the use of scarce resources. Survey respondents were split on the significance of these challenges. More than half said supply chain constraints will likely impact renewable growth only temporarily because developers can find alternative suppliers of wind and solar manufactured components. But they were slightly more concerned about critical minerals such as lithium, cobalt, nickel, and rare earth elements, with 50% saying that constrained supplies will likely slow growth of wind, solar and energy storage. Conclusion Of five challenges the power and utilities industry faces in the renewable energy transition,