Record $330bn invested in renewable energy

 
Liebreich took part in a discussion on global energy trends on Tuesday during the first day of the African Utility Week, which is taking place at the Cape Town International Convention Centre (CTICC).
 
Previously, when oil and gas prices dropped, investment in clean energy also stalled, Liebreich said. “But not this time around. We're in a low-cost-of-oil environment for the foreseeable future, but this is not stopping renewable energy investment.”
 
He reminded the audience that he had said five years ago that renewable energy is not too expensive, nor a “rich man’s indulgence” as some believed. “Already then I said wind power and solar were much cheaper in places.. compared to what Africans were paying for their energy at the time.”
 
The cost of solar energy has recently dipped in Mexico, where the Italian power company Enel recently bid a price of 3.6 US cents per kilowatt-hour. Wind energy also came in below 3c/kWh in an auction in Morocco earlier this year, said Liebreich.
 
“And 3c is not going to be the cheapest you’ve ever seen. All of the technology needed for a clean energy revolution will follow this path.”
 
He acknowledged that the transition to clean energy is like rebuilding the engine of an aeroplane when in flight. “In Africa it’s even more difficult. Here you’re trying to rebuild the engine when you’re in take-off. That’s a great challenge.”
 
He added though that African countries are fully able to attract investment in clean energy, despite the commodity price bust and credit ratings downgrades in places where the economy was surging some time ago. “But that too will pass,” he said, urging African governments to put in an effort to ensure the creditworthiness of their energy utilities.
 
Anton Eberhard, energy expert and professor at the University of Cape Town’s management programme in infrastructure reform and regulation, concluded the discussion by saying that business models for electricity generation which have worked for centuries are now being challenged.
 
“Renewable energy is breaking through in a way traditional power utilities cannot ignore any longer,” Eberhard said. Due to their variability, renewables are not suitable for base load generation, he added, but they "are becoming cheaper and we’ll have to maximise their contribution to the grid”.