From Oilprice.com, via Nasdaq.
It is the dawn of a new era and the oil and gas industry is chomping at the bit as the most industry-friendly administration in recent memory comes to power. But even as the regulatory environment for oil and gas drilling is about to get a lot easier, the inroads of clean energy and the steady pace of innovation in emerging technologies will continue.
In fact, in addition to the uncertainty surrounding the Trump administration, global threats to clean energy abound, including rising interest rates, economic weakness in China, and political risk in Europe. Still, these trends probably won’t “cause a clean energy shipwreck in 2017,” according to Bloomberg New Energy Finance, which predicts the clean energy sector will “sail on.”
And for good reason. In many parts of the world renewable energy has achieved escape velocity, reaching grid competitiveness with fossil fuels in many parts of the world. BNEF cites a wind project in Morocco that has an unsubsidized price of $30 per megawatt-hour and a solar project in Chile that generates electricity for $29.10/MWh. “These must be the lowest electricity prices, for any new project, of any technology, anywhere in the world, ever,” BNEF writes in its “10 Predictions for 2017.”
As renewables continue to carve out a larger share of electricity markets, the rules of the game are going to change. Low-cost wind and solar could transform electricity markets to a “base-cost renewables” structure, BNEF says. Instead of base-load electricity coming from coal, hydro, natural gas and nuclear, plus peak electricity from gas-fired peaker plants, the “base-cost renewables” model will see cheap renewables first, with the remainder to be filled with “flexible capacity from demand response, storage and gas, and then importing the remaining needs from neighbouring grids.”