Renewable energy already counts for 23% of the world’s electricity generation according to the latest figures from the National Renewable Lab. Some will argue that even this figure is rather low since the development of renewable energy technology has been growing significantly and their costs are on the decrease.

However, a number of factors are holding the renewable industry back. One of these is a lack of reliable energy storage technologies. Although a great deal of money is being ploughed into the development of storage technologies, utilities will not rush in until these have proven their reliability. Where storage solutions are available, for example hydroelectric pumped storage, it is normally not located close to the renewable source which makes the supply less controllable than fossil fuel supplies.

Outdated business models are another factor where some utilities continue to receive rewards for the construction and maintenance of fossil fuel plants. There is also the high initial capital cost of renewables. Although the costs of renewable energy technology are coming down, the initial implementation costs can be high.

Balance of system costs can add up as they include the cost of the inverter and electrical system, mechanical racking, installation, and permitting. However, large installations could work out cheaper than smaller installations.

There are numerous start-up companies in the renewable energy sector. This can be very confusing for the utility and they may opt for the cheapest option. Often, it doesn’t pay to go cheap and utilities may end up being disappointed by poor performance levels. This may lead utilities to believe that all renewable technology is of poor quality.

There is a need for new transmission corridors to serve remote sites, as well as extensive environmental impact assessments which can take years to complete. In addition, sometimes the ideal locations for renewable energy development may be too far from demand centres and existing distribution networks. To extend the transmission network, may cost a great deal of money.

Old models do not adequately consider input from renewable resources, preventing grid companies from including them in to the supply mix. The smart grid will also assist in the integration and management of renewable energy. It is therefore essential that the right technology exists to support the introduction and maintenance of renewables.

What would instigate renewables’ growth?

  • Negative preconceptions about renewable energy and technologies will need to be changed.
  • Increasing renewable energy requirements.
  • Dropping the rate of return as a basis for utility profit.
  • Rewards for utilities that switch to renewable energy.
  • An increase in research funds for energy storage solutions.
  • Upgrading of transmission infrastructure and technologies to support renewable energy integration.
  • An increase in the number of micro-grids. This would solve some of the transmission infrastructure issue.
  • Institutional funds ploughed in to renewables.

Despite the long list of negatives, renewable energy will continue to grow for the simple reason that cheap fossil fuels are dwindling. Renewables provides a sustainable energy source, and the technology simply needs a chance to develop further and compete with existing energy sources.

Regulators and utility companies must recognise the need for energy models to adapt, with smarter logic and comprehensive scenario planning. In addition, they have to develop comprehensive policies which will create a fair playing field for all energy technologies.

Source, Engerati, http://www.engerati.com/article/eight-obstacles-stand-way-renewable-energy?utm_source=Newsletter+09%2F04%2F2013&utm_campaign=06411a53d2-Issue_56_06Feb20142_5_2014&utm_medium=email&utm_term=0_63efbd591c-06411a53d2-59112901.