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October News Update - What the RE Royalties Team is Reading

It has been a busy few months at RE Royalties, in early October we announced that we had raised CAD $5.5 million in our first tranche of our green bond raise. Despite how busy that the team has been, we always make time for reading about the latest news in the renewable energy space. Here is what the team at RE Royalties has been reading.

The Response to the COVID Crisis can Reshape the Future of Energy

In a press release from the International Energy Agency, they commented on how the pandemic will lower global energy demand by 5% in 2020, energy-related CO2 emissions by 7%, and energy investment by 18%. The IEA examined scenarios for the future of energy demand and highlighted that renewables will take starring roles in all of the scenarios with solar being centre stage. The IEA mentions that solar PV is now consistently cheaper that new coal- or gas-fired plants in most countries with solar energy offering some of the lowest cost electricity ever seen. Renewables are expected to meet 80% of global electricity demand growth over the next decade with hydropower remaining largest renewable source but solar being the main source of growth. See the full article here to see how the future of energy is expected to change!

Alberta to Clear Hurdles for Geothermal Energy Development

In recent Canadian news, the energy minister of Alberta says the province intends to clear hurdles to the development of clean geothermal energy. The current United Conservative government has plans to introduce legislation that will set the stage for future development of geothermal energy. Alberta represents an exciting area for the future of geothermal in Canada with a 2016 report estimating that Alberta has 60,935 wells with bottom hole temperatures hotter than 60 °C. At this temperature, the wells have enough heat to be used to grow fresh produce or heat homes. To read more about this new development, please check out the article here.

2020 Levelized Cost of Electricity Analysis

The trend for wind and solar PV has been declining levelized costs of electricity (LCOE) and 2020 is no different. For wind, we have seen the LCOE fall from a range of $54-$28 in 2019 to $54-$26 in 2020. For reference, in 2009 the range was $169 to $101. With respect to solar, the range in 2019 was $44-$36 which has fallen to $42-$31 in 2020. It’s also worth pointing out that these numbers are completely unsubsidized. In 2009 this range was $394-$323. The costs of renewables have fallen an incredible amount over the past years. The falling costs have been the driver for the 2009-2020 solar PV CAGR growth of 19% and 11% CAGR for wind. To see the amazing decline in the cost of these technologies over time please click here.

Source: Lazard’s Levelized Cost of Energy Analysis – Version 14.0


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