Opinions are one thing, facts are another. Our species emerged over 3 million years when there was a stable quantity of CO2 in the atmosphere, and this was the figure up until industrialization: 270 parts per million. Now it is 405 and rising rapidly. This means that we are capturing more energy in the atmosphere than we used to. How much, I hear your readers ask? We are capturing the energy equivalent of 4 Hiroshima atomic bombs each second. In fact, since 1998 we have trapped the energy of 2,667,000,000 Hiroshima bombs in the atmosphere.

Cause for alarm? I think so.

I notice that Mr. Oplas didn’t talk about the price of coal-generated electricity. The US Agency, the CIA which studies these things, estimates that the cost of electricity coming from coal-fired generation over the life of the power station is $9.2 cents per unit. This figure was confirmed for me, as the cost of new coal generated electricity in the Philippines. This figure includes no clean-up charge.

In bidding for generation in Chile during 2016, where there is no subsidization of renewable energy, my company bid $4.1 cents per unit of electricity for 20 years.

This was for firm power, which means my company had to supply the equivalent of what coal or gas supplies. No variability, no intermittency, pure clean power that releases no CO2.

We will generate firm power from renewable energy at $4.1 cent per unit of electricity, which is less than half the price of coal-fired generation.

Solar came in at a price of $2.92 cents per unit.

Even old coal plants, which had its capital cost paid off, could not compete against new wind and solar. They won no contracts.

There is not a lot of difference between the Philippines and Chile. If a competition were run between coal versus wind and solar in the Philippines, renewables would come in at half the cost of coal.

I notice that Mr. Oplas is associating himself with an invite-only conference where there will be no challenge to his views. The only way to get to the truth is to issue the following challenge to Mr. Oplas: Let us choose a public auditorium and let us have a debate on energy policy in the Philippines. I guarantee the putative audience that I can prove that renewables are great for the Philippines. Great for firm power, great for price, and great for the environment. I will even pay for the venue.

I would love to see the Philippines cut the price of electricity in half, just as Chile has done, by adopting a competitive system for selecting the next tranche of generation.

Eddie O’Connor is Executive Chairman and Founder of global wind and solar development company Mainstream Renewable Power.

Eddie’s piece was published on Business World on-line on 09 October 2018.

Any discussion of energy should be considered in a few overriding human contexts, including political, technological, environmental, health and safety, cost, and security of supply.

On all these vectors wind and solar stand out as the energies that tick all the boxes.

One consideration, however, outweighs all others and it is that of the environment. You are entitled to ask why a businessman would put the environment first. Has the world of business not just reduced to profit and loss, cash flow, balance sheets, funding, risk aversion, and an overriding preoccupation with short-termism as evidenced by a 3-month reporting cycle.

So here are the reasons why the environment comes first:

One of Ireland’s great scientists John Tyndell, found that CO2 and CH4 (methane) absorb the suns radiation while oxygen and nitrogen allow sunlight to pass through.

The concentration of CO2 in the atmosphere had remained steady around 270/280 parts per million (PPMV) for circa 3 million years before industrialisation.

With industrialisation and population growth the figure stands at 405 PPMV and is rising rapidly. This means we are absorbing around the equivalent of 4 Hiroshima bombs every second into the atmosphere. 2,661,417 million such bombs have had their energies accumulate in the atmosphere since 1998.

Some of the effects of this are the following:

Global wildlife will decline by 67% from 1970 levels by 2020. This includes such events as the disappearance of the puffin population from St. Kilda because their feedstock, the sand eel population migrated northward due to heating of the local waters around St. Kilda.

The Arctic has heated by twice as much as the global average, with the result that the Northern Passage is now open for passage of ships when it never had been before. The 4 million people who occupy the Arctic are under threat, as are multiple species.

When I was on holiday in BC this year I became aware of asthma I hadn’t suffered for a few years. It seemed the whole place was on fire. Certainly, the central valley from Prince George to Vancouver (500 miles) was enveloped in wildfire produced smog.

The forest fires in Mendicino in California will take a month to extinguish. These fires and the rest of global evidence lead Gerry Brown, the Governor to say: “the Trump administration proposal to replace the (OBAMA) Clean Power Plan is a declaration of war against America, and all of humanity and California won’t be changing its emission standards”. He went on to issue order no 100 which mandated that California will be completely fossil free by 2045.

Enough energy arrives from the Sun each day to provide us with power to meet our needs many times over. Technology in the form of photovoltaics can turn sunlight directly into electricity. Wind is stored sunlight, which heats the world unevenly and, coupled with the rotation of the earth, will continue to yield energy as long as the sun shines.

This energy source is free, and it belongs to each nation. Wind and sun can never be charged for. This is in stark contrast to what the EU pays at the moment for its fossil fuels: €540bn every year. This figure includes subsidies which some states give to support the burning of fossil fuels.

The Paris agreement calls for sustainability, and each nation has a responsibility to build sustainability into its energy supply.

This challenge is one of the biggest business opportunities the world has ever seen. Many trillions of Euros will be spent on the transition to sustainability. New companies will emerge to champion the new technologies.
All the conventional measures of corporate success will be achieved. In line with the latest observations of companies like Google, Facebook, Alibaba, Amazon, there will be gigantic winners, while those that have stood and waited for the low risk phase will miss the boat.

As the Nobel Lauriate Mr Bob Dylan pointed out:

“come senators, congressmen heed ye the call,
don’t stand in the doorway, don’t block out the hall,
for he that gets hurt will be he who has stalled,
there’s a battle outside and it’s raging
will soon shake your windows and rattle your walls
for the times they are a changing”

We have observed and participated in this transition to sustainability with Airtricity and Mainstream Renewable Power.

Which brings me to the core messaging I want to impart. Doing the right thing for the environment is a precursor to good business. It is one of the key inputs. I would always argue that business is as much about meeting human and societal expectations as it is about anything else.

The key challenge with wind and solar is the variable nature of their output. I would distinguish between variability and intermittency. Intermittent is about being on and off, whereas a variable can change and exist anywhere between 0 and 100%.

Wind is variable and solar is both variable and intermittent. This challenge remains the key issue to be dealt with at a technology, political, and regulatory levels.

As an aside you will notice that I have not described cost as an issue. wind comes in at a cost approximately one half that of new coal, whereas solar comes in at a cost of one third of coal in sunny climates.

Even in dark places solar is competitive. This fact is particularly important when you consider that all thermal generating plant now existing in Europe will have to be replaced by 2050. The choice for generation is clear.

As we have said the issue for government and the customer is the variability of wind.

And now a word about resource. If we dream the undreamable that all fossil fuels will be replaced by renewably generated electricity then the EU needs 900,000mw of wind, and 950,000mw of solar PV. The only place we can get this wind, in the quantity we need is offshore.

Solar PV should be harvested where the greatest resource exists, and that is around the Mediterranean basin. For resource and political reasons, this is where the bulk of our solar resource should be harvested.

We do have the capability of accessing this power now. All grids in Europe are on land, and most grid companies see their brief as existing to supply their native populations. The added complication is that they are natural monopolies. Far from existing as competitive entities, which survive on their continuing ability to delight their customers, they are driven by rules, regulations, and technical standards, which feed a conservative mindset.

What is needed is the Supergrid. This is a Europe wide grid which sits alongside the existing transmission systems. It doesn’t replace these grids. It gets back to the original idea of why a grid exists in the first place. Simply to carry the electricity from producer to customer at minimum cost.

The cheapest way of providing reliable 24/7 power is a well-designed transmission system.  As an aside it should be pointed out that there is a massive resistance in all developed countries to the construction of overhead high voltage transmission lines.

Now let us apply this logic to the situation depicted above to the renewable energy resource maps. With renewable energy the great bulk of the wind resource is offshore. Overhead lines are not an option, so undersea cabling is called for.

We need a new grid to carry the offshore power to where the customers can consume. We call this new grid the Supergrid. In outline the Supergrid will look like this:

It is clear that the innovative part of this Supergrid is the SuperNode TM). We say this because

1. It turns the grid into a network.
2. It incorporates the new technology.
3. It links the solar resource from the Mediterranean Basin to the northern wind resource.
4. By capturing natural power over a very large area it helps deal with the intermittency of solar and the variability of wind.

There is another technical issue that has to be solved; the security of cables laid along the seabed. Up to now the least reliable part of offshore wind farms has been the cable bringing the electricity ashore. Most cables are laid along the seabed and ships anchors or submarines have damaged the cables. It was recounted to me in Brussels last week that Russian fishing vessels were seen parked off the Belgian coast over some undersea cables. They weren’t fishing.  A suggestion was made that when they departed they left a little charge behind them that could be activated from Moscow.

We are going to have to design secure cabling networks. Developers of offshore grids will be required to guarantee the reliability of the cables. Even without sabotage, this will require special measures when cables cross shipping lanes or near entrances to harbours for instance.

Another major change that technology now facilitates is the construction of all roof-tiles from photo-active materials. Why make a roof out of inert concrete tiles when they can be made from solar panels. These will protect from the weather as well as making electricity to be stored in a battery in the basement.
On the political front, the issues as I see them are:

• Governments will have to get used to the fact that electricity generation can be remote from their borders.
• Historically the importance of electricity to an economy lead Governments to locate their generation plants within their own borders. However, none of them had a problem with importing coal, oil, gas and uranium to power their local gen-sets. Even when the fossil raw materials were being imported from unstable regions of the world, governments became accustomed to relying on them.
• There is an enhanced role for the EU in the 100% renewable energy scenario. The EU is built on the principle that mutual interdependency is the civilised way of relating to one’s national neighbours.
• Some countries are coal or other fossil fuel producers. 70,000 coal miners were employed in Poland. Norway, which could have an important role to play in floating offshore wind, has large offshore gas reserves.
• As Nicholo Machivelli pointed out in The Prince:
  “There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success than to take the lead in the introduction of a new order of things. For the reformer has enemies in all those who profit by the old order, and only lukewarm defenders in all those who would profit by the new order, this lukewarmness arising partly from fear of their adversaries … and partly from the incredulity of mankind, who do not truly believe in anything new until they have had actual experience of it.”

For me, the issue never was “how will the world look at your new idea.” We all die anyway and the question is “did you give it your best shot?” and “did you walk the walk that others talked, and were you one in a million or were you one of the million?”

That’s all folks, thank you.

The simple fact is that the Philippines’ economy is falling behind its neighbours in the ASEAN region and much of this is to do with its failure to build power infrastructure at the necessary pace, according to the WEF’s World Competitiveness Report (see graphic below). Without electricity, much of the government’s ambitious programme is at risk.

The WEF data shows that that Philippines and Vietnam were ranked similarly in 2008, but that over the past decade Vietnam has performed significantly better, to a large degree due to its focus on improving electricity capacity. Vietnam now has double the amount of installed capacity than that of the Philippines, serving a smaller population.

Figure 5: Overall Infrastructure Rankings, ASEAN-6 2008 – 2017. Source: WEF Global Competitiveness Report (various years)

One technology – renewable energy – can provide the Philippines with large amounts of inexpensive and reliable power which can be built out quickly to help the country regain its regional leadership position.

Switching decisively to wind and solar power and away from coal will utilise the country’s own natural resources to help deliver the infrastructure development and economic growth that the government so clearly wants.

Over the course of the last few years, the cost of these technologies has continued to fall dramatically to a point now where globally wind and solar power costs between a quarter and a half the price of the equivalent coal plant to construct, and once built the fuel is both free and inexhaustible.

At present coal is the Philippines biggest single generation source, and the country imports three-quarters of its supply, exposing consumers to price volatility and high power prices. As a result, the Philippines has one of the highest electricity rates in the region, and this acts as a drag on local business. The government has started to address this by passing into law the Tax Reform for Acceleration and Inclusion (TRAIN) Bill late last year, which includes excise and value-added taxes on imported coal from Indonesia and Australia.

Secondly, once environmental permits have been received, wind and solar can be built very quickly, with average construction times of around one year for a utility-scale plant, compared to three to seven years for a coal-fired power station.

And thirdly, unlike coal, renewable energy is by its very nature local, allowing the Philippines to increase its energy security.

Coal is also a poor investment choice; even in the Philippines new coal plant has to be incentivised with a relaxation of import duties and tax holidays. In markets across the world coal miners and coal generators are under significant financial pressure. Previously rock-solid electric utilities are now haemorrhaging cash, trying to shore up balance sheets undermined by the inexorable advance of new technologies, and the inevitability of disinvestment driven by global climate agreements.

By contrast, renewables are now an investment favourite.  USD330 billion was invested in new renewable energy power plant globally last year. 98GW of new solar power capacity was added, with over half in China. That is nearly five times the total power on the Philippines grid.

The future demand for electricity is absolutely assured.   Every major car company is planning to add electric vehicles to their fleet, phasing out the internal combustion engine over the next two decades. The demand for electricity will increase by up to a quarter when the conversion to electric vehicles is complete.

As the amount of electrification in any country is the main determinant of economic growth in that country, so the type of energy that a country invests in will be crucial for future economic development and define what kind of economy nations are able to build.

The Philippines has a huge opportunity to build the region’s first truly digital economy, underpinned by the government’s infrastructure plans, and powered by locally generated renewable energy. This new society will be based on full electrification, and driven by the creation and articulation of ever larger amounts of data across all areas of the economy, from autonomous vehicles to home appliances and research and advanced manufacturing.

This is a huge potential prize for the country. To leapfrog its neighbours and embrace the potential of this century’s new digital frontiers, rather than continue to shackle itself to the fossil-fuelled economic models of the early 20^th century. It is a future which the government clearly sees, and its ambitions for reform and development are to be applauded. Working together, we can go further and faster on bringing forward renewables to power the country into a new century.

Opinion piece featured in the Manila Inquirer, February 2018.

Speaking at the Energy Institute at University College, Dublin, Eddie O’Connor, the founder and chairman of Mainstream Renewable Power called on European governments to follow the climate and energy leadership of President Macron of France.

“Last year President Macron set out six key actions to change Europe. One was to “ecologically transform” the continent, and to lead international action on combatting climate change. Underpinning this action is the creation of a European energy market.

“At a time when our political focus is distracted by Brexit, I am following President Macron’s lead and setting out, as an engineer, practical and technical steps that will bring all the countries of Europe closer.

“Last year, for the first time ever, Europe generated more electricity from wind, solar and biomass than from coal.[1] This is a clear sign that a transformation is underway, but we need to go further, faster.

“An interconnected energy market based on renewable energy instead of fossil fuels linked by Supergrid will deliver cheaper power to consumers across Europe and enable us to meet our climate goals.

“While good work is underway across the North Seas region to better connect countries, we need a single architect to design a meshed grid based on the SuperNode. This will be the electric super-highway which will link wind generation in Ireland to customers across the continent, and bring Spanish solar power to light homes in Dublin.

“Ultimately, the SuperNode will bring about the type of ‘ecological transformation’ that President Macron called for.  This is a proper European project; a New Digital and Renewable Deal as the 21^st century successor to the Coal and Steel Pact which laid the foundations of the European Union.”

[1] https://www.carbonbrief.org/eu-got-less-electricity-from-coal-than-renewables-2017?utm_content=bufferddb2a&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

At the launch of the IPhone ten years ago it was hailed as an interesting product and a challenge to incumbents, but few predicted the dramatic change that it ushered in. The smartphone is now ubiquitous, and it has created entirely new companies and services that didn’t exist before its launch.

Renewable energy is at that same launch point – and the next ten years will both consolidate its place in the electricity sector, while delivering a range of new opportunities for customers across the world. All at the same time as helping us meet our overriding climate change objectives.

The Philippines faces an energy choice. It can lock itself into building expensive new coal plant – the power sector equivalent of landline telephones, or switch to a mix with a much larger component of cheaper renewable energy – the smartphone alternative, which can also deliver electricity to off-grid communities where coal cannot reach.

While coal has powered much of the economic growth in countries across SE Asia, the next phase in the growth story will be powered by wind and solar energy. This will happen for two reasons. Firstly, because these technologies are now cost competitive with coal, and already significantly cheaper in many markets, and secondly because few investors will take the stranded asset risk that new coal plant now represents.

Last July a Philippines company offered to replace 5000MW of planned new coal plant with solar photovoltaic generation which, they claimed, would reduce electricity rates by 30% and save the country 100bn pesos every year. Similar savings would accrue from the large-scale deployment of wind power for the simple fact that new wind and new solar can now compete on cost with new unabated coal generation, and are very significantly cheaper when the price of carbon is factored in.

This dramatic fall in the cost of generation from wind and solar energy is having immediate consequences for other forms of power production in the region. China has cancelled 120GW of planned coal plants, including 54GW of capacity already under construction. India has cancelled nearly 20GW.

Bloomberg estimates that less than one in five of the world’s planned coal plants today will ever get built, resulting in 369GW of cancelled projects.

This presents investors with a clear risk of funding stranded assets.

In addition, the commitments made by the Philippines, and the global community, in signing the Paris Agreement mean that we cannot continue to burn coal unabated. If we are to meet our commitment to limiting global temperature rises to 2^oc then we will have to abandon fossil generation by 2030. No-one should invest in new coal plant on that basis; it is simply not an economically rational decision to make.

Only last week Reuters reported that coal prices in Asia were rising as supplies are constrained, in part due to investment concerns driven by the realities of the Paris Agreement. As coal prices rise, the cost competitiveness of renewables increases further.

This should not be seen as a conspiracy to hobble growth economies. Rather it is the opposite. It is an opportunity to embrace the new technology that will power our future, and build the new businesses and organisations that will create growth and employment.

Renewable energy is essentially a technology business – with rapid change and innovation delivering ever decreasing prices, and constant improvement in performance. It is already driving hugely exciting developments including electric vehicles, storage, demand-side management, and above all customer involvement. It is democratising the power sector in the same way that the smartphone has enabled people to break out of the constraints of yesterday’s society.

As with the smartphone the next range of customer benefits will come not just from continued dramatic cost reduction in the hardware, but from ancillary services designed by customers themselves. The Airbnbs, Ubers and Twitters of the electricity industry are being born all around us, and these will drive the next wave of innovation and consumer choice.

Perceived issues around the intermittency of renewables – and they are only perceived – will be removed by ongoing advances in storage and smart technology. Coal’s last claim to hegemony – baseload – will be a millstone not an advantage as a technology designed, literally, for the steam age simply cannot compete in a digital world.

In Chile last year, in the country’s annual power auction, companies providing wind and solar power bid half the cost of coal to deliver firm power to customers. In South Africa, blessed with some of the cheapest coal in world, new wind and solar plant is being developed for less than half the cost of coal generation currently under construction.

Critics of wind and solar power still claim that they are unreliable and expensive. Chile, South Africa and many other countries, show that the opposite is the case. Competitive auctions in markets around the world illustrate clearly how the cost of wind and solar plant has fallen to parity with coal – and below.

This is just the beginning. There is a huge opportunity for the Philippines to be at the cutting edge of the technology development around this shift to renewable energy. Energy is the lifeblood of any economy; without electricity there cannot be economic growth. What has changed is that we have found a cheaper and better way of producing it.

Dr Eddie O’Connor is the Ambassador for the Global Wind Energy Council.

In their decision the Lord President Lord Carloway, Scotland’s senior judge, sitting with Lord Menzies and Lord Brodie, issued a trenchant restatement of the law of judicial review. Simply put,

““It is not the role of the Court to test the ecological or planning judgements made in the course of the decision making process…” Parliament has determined that the decision-maker in this area is not to be a judge…in the formal setting of a court room.”

This is a welcome decision for Mainstream. We have been developing this project since 2009. At every stage, we have worked closely and patiently with our environmental partners to assess and mitigate the potential impact of our Neart na Gaoithe project (“NNG”) on marine wildlife.

The Appeal Court judges recognised that fact in the decision.

For us, it is not just about this one project. It is about building new energy systems that will make a material contribution to combatting climate change – the very climate change that is warming the waters around the British Isles and by driving sand eel populations northwards, depriving iconic bird species of their traditional feeding grounds.

We all recognise that the RSPB has a duty to its members to act to protect the UK’s bird populations, and we have had a constructive relationship with them for many years.

What is disappointing is that in order to justify the judicial review they have sought to dramatically overstate the potential impact of this project on birdlife in the Forth and Tay estuaries.

Recent suggestions 1,000s of gannets could be harmed are so far from reality it undermines our ability to work together constructively to find common solutions to help mitigate climate change impact on Scotland’s marine wildlife.

Several reports in recent years have suggested climate change is the major factor in the decline on many seabird populations.

In the period since NNG submitted its offshore planning application, advances in turbine technology have enabled us to alter the design of the site to significantly reduce turbine numbers, and to space them out, while maintaining output, and the amount of CO₂ emissions displaced.

Recent scoping submissions to Marine Scotland show that the number of turbines proposed for the Forth and Tay area is now around half the proposed number from when the applications were submitted.

Alongside advances in turbine technology, there have been similar advances in our understanding of seabird behaviour around offshore turbines.  The ORJIP (Offshore Renewable Joint Industry Programme) Bird Collision study has used real data from the 100-turbine Thanet offshore windfarm to identify bird behaviour around large offshore infrastructure projects.

While the draft findings have not been released, I am reassured by what is being discovered about bird activity and avoidance. The RSPB is also aware of this data, which is why their strident reaction to the court decision is so puzzling.

The advances in turbine technology, reduction in turbine numbers and improvements in knowledge of seabird behaviour, mean that previous assessments of risk to birds are gross overestimates.

Mainstream is committed to undertaking studies of a similar scale to the ORJIP study when NNG is operational, to reduce risk to wildlife and to further improve science in this area.  We hope that this can be undertaken in collaboration with the RSPB and other environmental organisations.

I am reassured by the more measured views of the RSPB’s sister environmental organisations. On Monday, the WWF’s Director for Advocacy tweeted “This looks amazing” next to a story on the successful completion of the Burbo Bank offshore windfarm, a project part owned by LEGO, which has installed the world’s largest offshore turbines, the Vestas 8MW machine.

We all want to do the right thing for the environment. I set up Mainstream to help the world achieve its once off transition to sustainability. As I set out earlier, Lord Carloway and his colleagues referred to the importance of NNG in the battle against global warming.  This is a huge driving force for us at Mainstream, where the company has committed itself to leading the drive to make electricity without emitting CO₂.

I want to work with the RSPB and all our partners to build NNG in a way that has the least impact on the environment.

We have significantly reduced the number of turbines in the project. They will be spaced over a kilometre apart, providing huge corridors for transit. The project will also act as an artificial reef and by so doing enable the build-up of fish stocks, which have also been decimated by climate change.

It is time for our friends in the RSPB and across the environmental movement to sit down with us, and with the Scottish government, to agree on a common objective – the imminent risk to all life, avian and human, posed by climate change, and the necessity to work together to find solutions to this, the greatest challenge of our age.

Global climate policy and new emissions standards are driving coal out of many markets as a source of power. In March 2017 it was reported that in the UK coal consumption has fallen from over 200mtonnes a year at its peak in the late 1950s to 18mtonnes last year. Coal may be disappearing as a source of electricity, but its legacy lives on in the electricity systems and grids that were built to take its power.

If renewable energy is to become the main source of power for the 21st century, allowing us to meet the decarbonization targets agreed in Paris, those remaining “system” obstacles must be removed. The good news is that new technology is enabling renewables generators to deliver “firm” power even within the constraints of existing power systems.

The biggest obstacle to global power sector decarbonisation is inflexible electricity systems designed for the coal era. In some markets, system operators have to curtail wind and solar generation as the existing grid cannot ship the electricity to market, or store it for future use. In others – such as Germany – a decision by government to close existing nuclear plant has led to deeply polluting coal power plant remaining on line, despite rapid growth in renewables. Still in others, like the U.K., the government has created a “capacity market” to provide additional reserve generation should there be insufficient renewable power available. What they should be doing is interconnecting their markets to allow supply to flow in both directions, so that surplus British wind can replace German coal, and extra German solar can supplement gas on the UK system. Then both countries could mothball their most polluting coal and diesel plant for good.

But renewables generators are adapting too. The old “take and pay” model – where wind and solar power plant was paid for every unit generated no matter if it was needed — can be replaced by one where renewables generators supply “firm” power on demand. Rapid advances in storage and demand-side management, as well as forecasting and generation technology, are enabling generators to shoulder the responsibility for providing “firm” power even in existing systems built for always-on coal power.

That renewable producers are able to do this may surprise some given the reputation that renewables cannot be a main source of power because of their problem with “intermittency.” That, however, is no longer the case. Let me explain, using Chile as an example.

Chile’s regulator contracts for “firm” power; that is, its auction system awards long-term power contracts that require companies to meet the demand of customers 24 hours a day. Generators are therefore obliged to make up any shortfall in the amount of power that they are contracted to supply by buying power on the spot market, exposing them to considerable price risk.

By working this way, the Chilean system operator avoids having to deal with the peaks and troughs of supply as the amount of renewable energy in the system increases, moving responsibility to the suppliers instead. And yet this hasn’t stopped wind and solar companies from winning the lion’s share of contracts in competitive power auctions. Our company, Mainstream Renewable Power, was recently awarded seven power contracts in the last tender alone, requiring the construction of new wind power plants with a combined capacity of almost 1GW.

So how are we and others able to turn “intermittent” power into “firm” power and provide consumers with the energy they need full-time?

The first factor is innovation. By generating precise wind measurement data for each project, we were able to build an accurate model of how much of the required energy each project would be able to deliver and how much energy each project would have to buy in the spot market. This in turn allowed us to bid at competitive prices in the tender, with the confidence that revenues would cover the cost of building the projects and the trading risk inherent in the contracts. The development of large scale energy storage – whether using batteries, thermal energy, gravity or other technologies — will make projects even more economically attractive in the future.

Also underpinning these competitive prices are technological improvements at the production level. Better sensors and data-driven analytics, cheaper and lighter materials and bigger blades allow cutting edge renewable companies to further reduce the price of constructing new plants.

The second factor is scale. Renewable supply works best when it benefits from geographic diversity. In our case, each of the seven projects has a different wind profile and therefore produces power at different times of the day. This lets us combine output from the different projects to supply the energy required, reduce the time that no power is being generated by the projects, and thus reduce the need to trade in the spot market.

Chile provides just a taste of what could be done in bigger and more diverse markets such as North America or Europe.

The Chilean model is being closely studied by regulators and governments and could provide an obvious solution in places like Germany and the U.K., where dysfunctional markets are stymying renewables growth and leading governments to maintain — or even subsidize –- dirty coal and diesel generation. Increased penetration of renewables can create a virtuous circle that will continue to lower costs to the consumer as the cost of the technology falls further, and create more demand, while also bringing lower production and financing costs thanks to increased scale. The idea of firm renewables is no longer an oxymoron.

Renewable energy is reaching a similar moment – its ‘iPhone moment’. Technology advances and accumulated expertise in construction and deployment of wind and solar energy have come together in a way that has created a true tipping point in the energy industry. Ten years ago wind and solar power were considered environmentally and ethically desirable, but were still a relatively high cost compared to incumbent fossil fuel generation. But now, renewables have passed the cost tipping point with the fossil fuel family’s cheapest option – coal.

The effect is that renewables have become the ultimate disruptor in the energy industry, just the way the iPhone did with mobile telephony. Not only do renewables now present a more favourable business case, they are also dramatically changing the way people interact with energy and its sources – especially wind and solar.

The Tipping Point
It is widely acknowledged that wind and solar power are now cheaper than coal in many parts of the world.

For wind energy, bigger turbine blades, better and cheaper materials, and better use of data have driven multiple efficiencies allowing the technology to steadily raise efficiency and cut costs. For solar, huge increases in scale along with steady improvements in quality control have pushed prices down at an exponential rate, making it likely that it will be the lowest-cost option almost everywhere in less than ten years.

This is a process that I have seen from my own involvement in the early days of the industry, from building Ireland’s first wind farm in in Bellacorick in 1992 (it’s still going strong 25 years on) to developing some of the world’s most competitive wind and solar plant in South Africa and Chile. I’ve seen this trajectory with my own eyes and the numbers are compelling.

According to analysis by financial advisers Lazard, the cost to build a utility-scale solar photovoltaic plant fell by about 80 percent from 2009 to 2014 while wind projects dropped by 60 percent. More recently, the International Renewable Energy Agency (IRENA) anticipates a further drop of 43 percent to 65 percent for solar costs by 2025. Adnan Amin, IRENA’s director general believes “these are game-changing numbers, and it’s becoming normal in more and more markets”. Based on what we’ve seen at Mainstream Renewable Power, he is absolutely right.

Changing of the Guard
More and more countries are fast-tracking the transition to renewable energy in order to assure the sustainability of their environment and their economies. China’s pollution crisis is just the most shocking example of the effects on human health and economic activity of the reliance on polluting fossil fuels, and this has in part driven the country’s decision to invest USD352bn into renewable energy by 2020 in a decisive shift from coal.

Even in coal producing countries like South Africa, the tide has begun to turn against fossil fuels with renewables quickly picking up ground as a preferred option for investment. Wind and solar projects have reached a level of cost competitiveness where they are cheaper than new coal. Data from recent competitive tenders shows wind at a cost of 0.62 Rand per kilowatt hour compared to coal at a cost of 0.93 Rand per kilowatt hour Coal-fired plant currently under construction by Eskom, the national utility, is estimated to cost 1.20 Rand per kilowatt hour.

In Chile, in 2016 the renewables sector underlined its competitiveness where, led by Mainstream, it won 27% of the capacity offered in the electricity tenders with prices as low as US$38.8/MWh significantly undercutting the incumbent fossil generators.
But this is just the beginning.

The War is Over – people just haven’t realised
Although new coal plant are still planned in some parts of the world, the war has effectively been won. The business model for coal is failing, as ever larger numbers of upstream and downstream projects are now deemed uneconomic, and investors are growing increasingly worried about stranded assets and decommissioning costs.

Now is the time, as the smoke of battle between old and new generation clears, to put in place a framework which will underpin the next growth phase for renewables. The switch from fixed tariffs to competitive auctions over the last five years has driven huge cost savings within the industry to the significant benefit of the customer. However, as with the iPhone the next range of customer benefits will come not from continued dramatic cost reduction in the hardware, but from ancillary services, such as storage, demand side management and increased system flexibility. The Airbnbs, Ubers and Twitters of the electricity industry are being born all around us, and these will drive the next wave of innovation and customer choice.

As these new markets develop it is important that we avoid a “race to the bottom” in the delivery of new renewable plant. There is a balance to be struck between cost and delivery, and while that balance is in equilibrium in most markets, it only takes one obstreperous utility incumbent, a dithering regulator or a delayed planning process to raise the risk profile of the project and tilt that balance away from the developer and the customer and raise costs.

I am confident that governments and renewable energy companies like ours recognise that it is in everyone’s interest, from investors to customers, that projects are delivered and companies are protected against delays that can damage project economics.

While at the time of its launch the iPhone was hailed as an interesting product and a challenge to incumbents, few predicted the dramatic pace of change that it ushered in. The Smartphone is now ubiquitous, and it has created entirely new companies and services that didn’t exist before its launch. Renewable energy is at that same launch point – and the next ten years will both consolidate its place in the electricity sector, while delivering a range of new opportunities for customers across the world. All at the same time as helping us meet our overriding climate change objectives. That is a world I am looking forward to help to deliver.

Two years ago this week, during the U.N.’s Climate Summit, over 300,000 people marched through New York City demanding action on climate change. The following day, the Rockefeller Brothers Fund (RBF) made an announcement to support their aims; the foundation would drop fossil fuel holdings from its endowment to better align it with its mission of a more sustainable world. The initial origin of the Rockefeller families’ philanthropic dollars in the oil industry made the commitment particularly meaningful. In the latest step, earlier this year, the RBF and a group of like-minded impact investors were pleased to announce their partnership in investing in Mainstream Renewable Power, a pioneer in deploying wind and solar power in Africa. This investment will help Mainstream and its partners to build over 1.3GW of new generation capacity in countries including South Africa, Ghana, Senegal, and Egypt.

The teaming up of a foundation established by the descendants of the first global oil magnate and one of the world’s leading renewable energy companies comes at a crucial time. It meets three interlinked challenges.

Firstly, the world is moving through a transition from fossil fuel to clean energy, as the significance of the threat posed by climate change becomes increasingly clear and informs the actions of private companies and governments.

Since 2013, the world has added more renewable energy capacity each year than coal, natural gas, and oil combined, according to Bloomberg New Energy Finance. And by 2030, the power capacity from renewable power will be four times that of fossil fuels.

Truly, we can now see the emerging outlines of a new energy economy that could provide the world with a cleaner, sustainable, power system and create enormous investment opportunities and new skilled jobs in markets around the world.

The last great energy transition took place in the 1920s and ‘30s, and involved both widespread electrification in the world’s richest countries and the creation of a global oil industry. Its leading figure was John D. Rockefeller, one of America’s greatest entrepreneurs, who saw the advantages of petroleum as cheap energy.

Established in 1940 by John D. Rockefeller’s grandsons, the Rockefeller Brothers Fund has spent the last 75 years making grants to organizations that advance social change to create a more just, sustainable, and peaceful world.

The RBF has been supporting work to mitigate the effects of climate change for more than 20 years.In 2010, the Fund resolved to amplify this support by investing 10 percent of its endowment in projects that further its philanthropic mission, and in 2014, the RBF announced that it would divest from all fossil fuel assets. With the investment in Mainstream, the Fund is taking the next step and investing directly in a renewable power company which is leading the global transition to sustainability.

The second major challenge that this investment addresses is electrifying Africa in order to change the lives of billions of people that are currently without access to power while helping their communities leapfrog past unhealthy, polluting generation systems.

A number of international initiatives have been set up to address this vital area, including the US Administration’s Power Africa program and the UN’s Sustainable Energy for All (SE4All). However, the fact is that on current trends, the amount of people suffering energy poverty in Africa is set to rise in absolute terms rather than fall over the coming decade. It is vital that we start to deploy the vast amounts of capital available around the world into building the solar and wind plants that will allow enterprise and education, and change people’s lives for good. Philanthropic foundations like the RBF are increasingly active as “impact investors” and we believe this sector can play an important role in unlocking the kind of step change in investment that is needed.

Finally, we believe that our joint project to develop Africa’s power system using clean energy can play a major part in combatting what commentators have called “secular stagnation”. This economic malaise is characterised by a glut of savings throughout the developed world, to zero and even negative interest rates, to huge risk adversity on the part of business and, above all, to a universal reluctance to invest in the future.

We believe that investing in Africa’s power system – to “plug Africa into the grid of the global economy”, in President Obama’s words, will unlock the huge well of creativity and energy that the continent’s people represent. This could be a key element in combatting secular stagnation and allowing the world economy to get moving, through a new global investment initiative similar in scale and purpose to the US Marshall Plan to rebuild Europe and Asia in the 1940s and 1950s.

We hope that this first coming together of Mainstream, the RBF, and our other impact investment partners can provide an example of how this can be done, in a way that truly benefits people worldwide and helps safeguard the future.

We are confident that if John D. Rockefeller were alive today, he would be at the forefront of the shift to renewable resources and the effort to develop sustainable power in Africa and across the world.