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Global fossil fuel prices have slid dramatically due to a mixture of weakened demand and oversupply, making the switch to renewable energy slower.

Germany’s transition to renewable energy by making fossil fuels more expensive raises the cost of German industry, causing industries and jobs to leave for cheaper options.

Germany’s climate-friendly policies are among the world’s most ambitious (a target of 80% electricity from renewable sources by 2050), and they are popular with the German electorate.

Many renewable energy business models today rely on a mixture of government regulation and subsidies, rather than cost competitiveness, to derive profit. Even if renewables are cost-competitive sans subsidies, they suffer from another fundamental problem – irregular supply.

Germany has rapidly developed its renewables production capacity but has had mixed outcomes. Energy prices are uncompetitive; its energy security record is mixed; and it has not sufficiently reduced its CO2 emissions.

The Ups and Downs of Batteries and Renewable Energy

As part of the Centre for Strategic Futures’ (CSF) foresight work, we scan and monitor key trends regularly, and explore different ways in which these trends might play out. Two trends that CSF looked into last year, in partnership with the Ministry of Trade and Industry’s Futures Group, were in the areas of renewable energy and battery technology. This infographic outlines the current landscape of

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Battery capacity has been slow to develop – increasing at the rate of only 6% per year in the last 150 years. Most improvements in the runtime of portable devices have come from reducing power consumption, rather than with better batteries.

Battery costs may drop more quickly than expected with bold, large-scale investments like electric vehicle manufacturer Tesla’s US$5 billion Gigafactory in the United States.

The price of batteries falls below US$230/kWh, making renewables much more viable.

The game-changing rise of renewables removes current geography-based dynamics of energy resources.

Germany is modifying its energy policy for a sustainable path towards a renewable energy future that maintains the export competitiveness of its industry. It will retain renewable energy production rebates while allowing the renewables sector to grow at a reasonable pace and use natural gas as a bridging fuel to achieve energy independence, while staying on track with emission reduction goals.

The Gigafactory takes advantage of economies of scale to drive cost reduction, rather than through radical changes in battery technology.

Risk Opportunity

renewable energy and battery technology, and explores the possibilities of where we could get to, what stakeholders such as the private sector and government could do to get to these outcomes more quickly, and some pitfalls that could slow us down.

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