Barriers to Renewable Energy Technologies

Despite the ravages of the COVID-19 pandemic, global additions of renewable energy capacity in 2020 surpassed those of 2019 by 50%. The share of renewables being added to the global energy mix was encouraging, with both solar and wind leading the way.

Still, renewable energy technology accounts for about 20% of the world’s energy consumption. Barriers persist, making the introduction of renewables into daily use and their sustenance challenging. Fortunately, the barriers ranging from capital cost to siting have been identified, and solutions have been applied in some quarters.

Contrary to many people’s concern that global energy is inadequate, renewables alone have more energy than we can ever need. The problem is in the following barriers to renewable energy technologies.

Decentralized model, a source for siting and transmission headaches

The distribution of renewable energy resources is different from that of gas and oil resources. It is often a decentralized model, meaning that it takes several sources that are spread out to combine and produce enough power.

If an area is densely populated, optimal use of renewable energy technologies becomes a challenge. Siting these resources in a way that human opposition is minimal is difficult. Instead of the project “choosing” the site, the reverse happens for renewable technology. Take the case of the United States, where solar irradiance is highest in the southwestern regions and some southeastern parts. Such inflexibility is a constant hindrance to the penetration of renewables in many parts globally.

The locations of wind or solar resources are not necessarily close to the demand areas or existing power infrastructure. Engineers often have to consider the trade-off between the cost of infrastructure access and the ideal sites for electricity generation.

Some citizens are not accustomed to seeing power infrastructure. Local opposition to renewable energy projects can be high, especially at the local level. Concerns about property values and lost ecosystems are real.

Interestingly, some people agree with the viability of renewable energy technologies, only not in their backyards. Researchers have even given a name to this attitude: 'Not in my backyard’ (NIMBY) syndrome. Opposition often stems from grassroots groups, local politicians, environmental groups, and individuals.

High Initial Cost

Running renewable energy technologies is affordable because of the low maintenance requirements and availability of free “fuel”. Unfortunately, setting up a solar or wind farm is still exorbitant for many would-be investors.

The high capital costs for the deployment of renewables contribute to the lifecycle costs for these projects. Adding this to the high net payback period, it is understandable why some investors are apprehensive about renewable energy technologies. Manufacturers and consumers may have inadequate capital for solar or wind farms, hence they may require financing. This challenge is further compounded by the stringent lending requirements for financing newer energy projects.

Renewables may be considered risky investments because of the high initial cost, so even when funding is available, it is at higher rates.

High initial capital cost is just part of the economic challenges bedeviling these technologies. Competition from fossil fuels is still high, with most countries still being dependent on coal. Intangible costs linked to societal and environmental impact are still unaccounted for in most countries, so evaluation of actual costs for renewables and alternatives is still ineffective.

Regulatory Challenges

Renewable energy technologies are unable to penetrate in areas where government policies, fiscal incentives, paperwork, and certifications are either absent or unfriendly. Renewable energy technologies may fail to take off when regulatory policies are weak. When policies are ineffective, then confusion between the implementation of renewables and non-renewables reigns.

Administrative challenges are also present in some areas. Delays or restrictions from government agencies can affect solar and wind technology projects. When lobbying is necessary, project costs are likely to increase. Factors such as these prolong project duration and essentially demotivate anyone interested in the investment.

Governments may commit on paper to policy targets, but the actual implementation may not be forthcoming. The government is responsible for dealing with commitment issues, but the responsiveness to the same is sometimes wanting. In creating policies, the government should focus on clarity of insight so that the industry can enjoy stable growth.

Conclusion

The net zero targets are well defined, but is everyone still focused on the prize? The street protects by young people before the pandemic may just prompt decision-makers to take more serious measures against the barriers we highlighted here.

We at QBI know that our efforts to help renewable energy companies run efficiently can be effective in altering the tide. With our army of experts and a world-class analytics platform to crown it all, we can demonstrate the possibility of transition to renewable energy.

We must remind though that collaboration, not only from local communities and leaders but also government agencies is paramount for this transition to succeed.

As we proudly play our role as transformers of raw data from renewable energy assets into business insights, we encourage you to continue pushing towards net zero carbon generation, however you can.

In case you are interested in modern-day RE asset management, you could start with a demo here!