Rising costs, along with supply chain issues for some of the commodities and goods needed for green projects, will not pose a long-term threat to the economic viability of clean energy, they said. last week at the Reuters Global Markets Forum.
Overhead costs that will decrease with economies of scale include items such as permit fees, labor costs for facilities, and customer acquisition costs.
Overall costs to industry will tend to fall as there are few barriers to expansion, said Harry Boyd Carpenter, managing director for green economy and climate change at the European Bank for Reconstruction and Development. development (EBRD).
Vaibhav Chaturvedi, member of the Energy, Environment and Water Council (CEEW), saw “greenflation”, or the costs associated with going green, as a concern, especially in the short term.
âThe underlying prices of raw materials are increasing all over the world,â he said.
The prices of metals such as tin, aluminum, copper, nickel cobalt, essential for energy transition technologies, have increased by 20 to 91% this year.
But Chaturvedi saw falling financing costs as a âbig leverâ to counter rising underlying costs.
Allied Market Research predicts that the global renewable energy market, valued at over $ 881 billion in 2020, will more than double to nearly $ 2 trillion by 2030.
Gauri Singh, Deputy Director General of the International Renewable Energy Agency (IRENA), argued that despite inflation and supply chain disruptions, falling financing costs have helped generate a record 260 gigawatts of energy from renewable sources last year.
âYou won’t get cheap money for anything that poses a climate risk. Whereas for renewables, the market is softening,â Singh said.