Investment banking giant Citi has released a report titled “Energy Darwinism – the evolution of the energy industry,” which claims that coal and natural gas face uncertain futures, while wind, solar and other renewables will eventually become the dominant forms of energy generation—and much sooner than current predictions hold. According to Citi’s analysts, “Consumers face economically viable choices and alternatives in the coming years which were not foreseen 5 years ago.” In conjunction with a variety of graphical analyses, this is taken to mean that drops in the prices of renewables, especially solar, have threatened the dominance of fossil fuels in much less time than originally thought.
The report, targeted primarily at investors in the energy sector, notes that while fuel diversity should continue to exist, investors are advised to “consider the sea change that we believe is only just beginning.”
One of the keys to the coming changes is the ability to store renewably generated energy. Much investment is being made in that area of the technology. “The increasing levels of investment and the emergence of subsidy schemes which drive volumes could lead to similarly dramatic reductions in cost as those seen in solar, which would then drive the virtuous circle of improving economics and volume adoption,” according to the report.
The report projects that while coal and oil have seen their most profitable days go by, we are now in the “golden age” of natural gas (mostly in the United States—nations with small amounts of natural gas, such as in Europe or Australia, are moving even more quickly towards renewables). Renewables continue to take a larger share of the energy market. By 2100, the report notes, coal will be phased out almost completely as an energy source, and oil will be reduced to about 10% of the market.