Rising interest rates have hit renewable energy harder than fossil-fuel based sources of energy, and could also impact the viability of nascent energy technologies like low-carbon hydrogen, according to an analysis published in April by Wood Mackenzie Power & Renewables. A two percentage point increase in interest rates hikes the levelized cost of electricity from renewables by as much as 20%, with utility-scale solar experiencing some of the greatest impacts, according to Wood Mackenzie. The LCOE for a combined-cycle natural gas plant, by contrast, increases just 11%, in part because fossil fuel generators already paid higher rates before central banks began to hike interest. Higher interest rates could jeopardize the energy transition and impact the U.S. push for more domestic manufacturing, said Peter Martin, Wood Mackenzie’s head of economics and the lead author on the interest rates report. It remains uncertain whether the U.S. Federal Reserve will begin to cut decades-high interest rates this year.
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While solar still has a lower levelized cost of energy (LCOE) than natural gas, early-stage renewable projects require substantial upfront investment, making them more vulnerable to rising interest rates as debt financing becomes more expensive. Because of this, investors will likely become more selective, potentially leaving lower-quality projects unfunded. Although the overall impact of rising interest rates on the energy transition is uncertain, one thing is clear: as investors become more discerning, the quality of early-stage projects will be critical. Read more in Utility Dive: https://lnkd.in/gP759GQw #RenewableEnergy #ProjectDevelopment #EnergyTransition
High interest rates hit renewable energy harder than natural gas: Wood Mackenzie
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Renewable energy projects have had bigger interest rate hikes than conventional energy projects. Over the past few quarters, we've seen how high interest rates slow solar adoption, even though wind and solar are still the cheapest energy source in many markets. We're keeping a close eye on the Fed's decisions about interest rates this year- they continue to factor hugely in the pace of US solar development. #SolarProjects #SolarFinance #CleanEnergy #KinectSolar
High interest rates hit renewable energy harder than natural gas: Wood Mackenzie
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Chairman of the Board of Directors at ENGIE
44%: This is the share of electricity supplied by #RenewableEnergies (including hydro) in the European Union in 2023. A record that : ➡ Confirms that the #EnergyTransition undertaken by #Europe in recent years is a reality and is paying off. This is something we can collectively welcome, without forgetting the journey still ahead and the need to accelerate this transformation. ➡ Recalls the importance of a European strategy to ensure that this energy transition is synonymous with #reindustrialization, by developing all the industrial potential in the sectors of wind turbines, #batteries, #hydrogen... The energy transition has a strong impact on europan industrial strategy , european competitiveness and employment in the region.
EU reaches record 44% renewable power in 2023, Ember reports
renewablesnow.com
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Germany is likely to generate more than 50% of its power ⚡️ from renewableenergy this year but needs to ramp up the speed of its transition towards the end of the decade. With demand for electricity on the rise, renewables would have to account for 80% of power generation by 2030. Read more here: 👉 https://lnkd.in/d27PAuW2 #C4E #Energy #Transition #Green
Germany likely to pass 50% mark for renewable power this year - minister
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Renewable energy projects have had bigger interest rate hikes than conventional energy projects. Over the past few quarters, we've seen how high interest rates slow solar adoption, even though wind and solar are still the cheapest energy source in many markets. We're keeping a close eye on the Fed's decisions about interest rates this year- they continue to factor hugely in the pace of US solar development. #SolarProjects #SolarFinance #CleanEnergy #KinectSolar
High interest rates hit renewable energy harder than natural gas: Wood Mackenzie
utilitydive.com
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Operations Executive | Strategic Development & Execution | Regulated And Renewable Energy Specialist | Driving Profitability & Growth | Transformative Initiatives Excellence through | Collaboration and Expert Insights
Despite the challenges, wind and solar energy remain among the cheapest sources of energy in many markets, considering their resilience and continued importance in the transition to a cleaner energy future. Further addressing the impact of rising interest rates will be crucial for sustaining momentum in renewable energy deployment and technology development. #RenewableEnergy #EnergyTransition
High interest rates hit renewable energy harder than natural gas: Wood Mackenzie
utilitydive.com
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Business Development with passion for international experiences, outdoor adventures, green initiatives
The Big Picture - Climate think tank Ember recently came out with a report stating that renewable energy has officially passed 30% of our global electricity supply, up from 19% in 2000. Solar power is scaling faster than any known power source to date — 2024 marks the 19th consecutive year it has been the fastest-growing electricity source.
Chart: Renewables generated a record 30% of global electricity in 2023
canarymedia.com
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Former Chairman and CEO Illinois Commerce Commission • Government Relations and Regulatory Policy Executive • Advisor
“The share of global electricity from renewables rose to a record 30% last year as the growth of wind and solar power continue to far exceed that of fossil fuels. That trend is set to accelerate this year, according to data from energy think-tank Ember. The group expects clean power growth to more than make up for the overall rise in electricity demand, leading fossil fuel-derived power generation to drop 2% in 2024. While gas and coal generation — the latter driven by a drought-induced decline in hydro-power — also increased last year, Ember forecasts that trend to end this year. “The decline of power sector emissions is now inevitable,” said Dave Jones, Ember’s director of global insights. “But the pace of emissions falls depends on how fast the renewables revolution continues.” https://lnkd.in/g5VHBG9a
Renewable Sources Provided Record 30% of Electricity Last Year
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Ember's Global Electricity Review 2024 reports that renewable energy contributed over 30% of the world's electricity last year, marking a record high thanks to a significant surge in wind and solar power. To discuss how we can support your renewable energy ambitions and projects, please get in touch. https://soamp.li/lALe via The Guardian #renewableenergy #solar #windenergy #engineering #components
Renewable energy passes 30% of world's electricity supply
soamp.li
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#NetZero UK: renewable energy generation reached record highs in 2023, accounting for 47.3% of total generation. First time more than half of UK's electricity came from renewables. Wind generation saw the biggest rise, reaching 28.7%. Fossil fuel generation hit a record low of 36.3%. Despite lower sunshine hours, solar increased by 4.1%.
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