DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.com PLC.
David Nelson is executive director of Climate Policy Initiative Energy Finance.
This tantalizing vision of the future is based on the dramatic cost declines we have seen in wind and solar.
In our report, Flexibility: the path to low-carbon, low-cost electricity grids, we forecast that from 2030, a system based on wind and solar would cost $70/MWh versus $73/MWh for a system based on gas.
If we can harness flexibility existing sources, including managing how and when consumers use electricity and including existing power plants for backup, the cost of the renewable-based system could fall much further. Even today, there is more flexibility on electricity systems than you might think. We found that most regions could easily reach 30% variable renewable energy by using flexibility that is already available in the system, while those with access to large reservoirs of hydroelectric power could achieve far higher levels. With better markets and price signals, all markets can go much further.
However, a future of widespread electricity grids powered by the sun and wind is not guaranteed unless market models are reimagined to encourage different types of flexibility in storage, delivery and consumption of energy. We cannot expect an electricity market designed around the price and market risks of fossil fuels to shift the required trillions of dollars of investment from fossil fuels to renewable energy and flexibility support.