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Evolution is unavoidable , whether it ’ s in biology , the economy , or technology . We must adapt to our changing environment or risk the consequences . Our energy system is no exception . Over the coming decades , tough decisions need to be made about how to evolve energy consumption . It will undoubtedly bring considerable challenges , such as how to balance supply and demand , but one that we must start to confront .
Globally , more than two-thirds of power comes from fossil fuels , highlighting the long road ahead before the world ’ s power is decarbonized . As we have observed in history , with energy sources declining to accommodate the emergence of new fuels , can renewables significantly decrease fossil fuel ’ s market share and become the dominant force in a new era of power generation ?
Growth of solar PV
Energy transition is not new , we ’ ve been doing it for thousands of years , adjusting our energy mix until it represents what we know today . We will continue this evolution by increasing wind and solar and decreasing natural gas , coal and oil to power our lives more sustainability . Thanks to modern technology , we can expect to see change happen faster than ever .
According to a report by Ember , solar capacity in Europe from 2019 to 2023 has more than doubled from 120GW to 257GW . In the next five years , renewable energy generation will continue to grow exponentially , with solar PV leading the way . According to the IEA ’ s Renewable 2023 report in 2028 , solar energy will surpass wind electricity generation .
One benefit for investors is that the marginal cost of generating electricity from solar is basically zero , after the capital costs have been spent . Unlike gas or coal plants , there are no additional charges to source sunshine , meaning that even at very low electricity market prices , it is still profitable to generate renewable electricity . As more solar generators come online , the price of solar power will become considerably cheaper than fossil fuels , naturally reducing the demand for natural gas , and accelerating the rate of decommissioning gas and coal power plants over the next decade . In Europe , the demand for natural gas has continued to decrease , falling by 7.4 percent in 2023 from the previous year .
Solar price cannibalization
However , solar must overcome a major barrier . Over the past few years , the volatility of electricity market prices has increased , as more renewable generation came online , and local generators export surplus power to the grid . We ’ re already seeing growing periods in Europe where the wholesale price of electricity is either zero or negative . This is a phenomenon known as ‘ solar price cannibalization ’.
Typically , solar price cannibalization occurs during periods of high sunshine or low electricity demand , such as on Sundays or summer holidays but increasingly
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