A new poll finds that the green energy industry is losing market share to coal mining, but also that the industry is getting stronger as a result.
A report from the Institute for Energy Economics and Financial Analysis (IERFA) has found that the cost of upgrading coal mines and coal power plants to operate safely and economically in the longer term has dropped from the low of $8.4bn in the early 2000s to the low $2.8bn in 2015, as coal companies cut costs.
The IEA said the costs have fallen mainly because of the cost-effectiveness of existing technologies, such as coal power station upgrades, but that coal companies have also seen their profit margins rise due to higher costs.
“These gains are particularly important for the industry’s growth prospects as it aims to grow beyond its current operating margins of $6.2bn in 2020 and $7.3bn in 2021,” said IEA executive director Andrew McAfee.
The IEEA said it expected that by 2025 the industry will have lost about 60 per cent of its market share.
The poll also found that more people are buying green energy than using it.
About 70 per cent said they planned to get more electricity from green sources by 2025, compared with about 60% in 2015.
But it was also clear that a significant amount of the demand from the new generation of energy sources was being met by existing generation.
About half of households in the US and the UK are currently getting more than 10 per cent or more of their electricity from the renewable energy sources that are being developed.
In Australia, which had a peak solar energy capacity in 2020 of 6,600MW, about 3.5 per cent were currently getting solar energy from existing generation, according to a new report from energy analysts at IEA.
Solar capacity in the United States is also increasing as the solar industry is growing.
While Australia was not a pioneer in the growth of solar, the country is still seeing the benefits from its deployment of wind power and the emergence of wind farms.
However, the US has already surpassed the US as the world’s largest market for green energy and has more than quadrupled its installed capacity in just the last three years.
The report said the transition to a green energy economy could take decades, and that there was no doubt that there would be major challenges ahead.
There are a number of uncertainties around the economics of the new wave of green energy, which could mean that many existing coal plants and mines will be retired.
The study noted that there were several major factors that were likely to influence the growth and future profitability of the green industry.
For example, new coal plants may require more upfront investment than existing mines and mines may be more efficient at extracting coal from existing coal reserves than existing coal mines.
And coal companies may be able to make up some of the lost market share by increasing production or cutting costs, it said.
The government is committed to ensuring that all of the UK’s renewable energy assets are available to meet the growing demand for energy, said Energy Secretary Amber Rudd.