Renewable Energy vs. Fossil Fuels: Economic, Environmental, and Energy Security Considerations
Bachelor's Thesis · ~72 pages · English
Abstract
This thesis provides a comparative analysis of renewable energy sources and fossil fuels across economic, environmental, and energy security dimensions. Drawing on levelized cost of energy data, life cycle assessment studies, and energy systems modeling, the research evaluates solar, wind, hydroelectric, and geothermal energy against coal, natural gas, and petroleum across metrics including generation cost, carbon intensity, land use, intermittency management, employment effects, and supply chain resilience. The analysis finds that renewable energy has achieved cost parity or advantage over fossil fuels in most applications, that grid-scale storage technologies are closing the intermittency gap, and that the primary barriers to accelerated transition are political and institutional rather than technical or economic.
1. Introduction
The global energy transition from fossil fuels to renewable sources represents one of the defining challenges of the 21st century, intersecting climate change mitigation, economic development, energy security, and geopolitical stability. Rapid cost declines in solar photovoltaics and wind power have fundamentally altered the economics of energy generation, making renewables cost-competitive with fossil fuels in most markets.
This thesis provides a comprehensive comparative assessment of renewable and fossil fuel energy systems, moving beyond single-metric comparisons to evaluate trade-offs across economic, environmental, and security dimensions. The goal is to inform evidence-based energy policy decisions.
2. Economic Comparison
Levelized cost of energy (LCOE) analysis reveals dramatic convergence and crossover:
Solar PV - Costs have declined 90% since 2010, reaching $24-50/MWh in most markets, below the operating cost of many existing coal plants.
Onshore Wind - At $25-55/MWh, competitive with natural gas combined cycle plants in most regions.
Offshore Wind - Costs declining rapidly ($50-100/MWh) but still premium to onshore alternatives.
Battery Storage - Lithium-ion costs have fallen 97% since 1991, with grid-scale installations increasingly cost-effective for 4-8 hour duration.
Fossil Fuel Hidden Costs - When externalities (air pollution, climate damages, health costs) are included, fossil fuels carry an additional $50-200/MWh in societal costs not reflected in market prices.
3. Transition Pathways and Policy
Energy systems modeling identifies feasible pathways to high-renewable grids:
• Technical Feasibility - Multiple peer-reviewed studies demonstrate that 80-100% renewable electricity systems are technically achievable with current technology, given sufficient storage and transmission investment • Grid Integration - Advanced weather forecasting, demand response, geographic diversification, and storage deployment collectively address intermittency concerns • Employment Effects - Renewable energy generates 1.5-3x more jobs per unit of energy produced than fossil fuels, though geographic distribution differs • Energy Security - Distributed renewable generation reduces dependence on imported fuels and vulnerability to supply disruptions
The thesis recommends carbon pricing as the most economically efficient transition mechanism, complemented by renewable portfolio standards, fossil fuel subsidy phase-outs, and targeted support for affected communities.
References
- [1]Jacobson, M. Z., & Delucchi, M. A. (2011). Providing all global energy with wind, water, and solar power, Part I: Technologies, energy resources, quantities and areas of infrastructure, and materials. Energy Policy, 39(3), 1154-1169.
- [2]IRENA. (2023). Renewable Power Generation Costs in 2022. International Renewable Energy Agency.
- [3]Pehl, M., Arvesen, A., Humpenöder, F., Popp, A., Hertwich, E. G., & Luderer, G. (2017). Understanding future emissions from low-carbon power systems by integration of life-cycle assessment and integrated energy modelling. Nature Energy, 2(12), 939-945.
- [4]Lazard. (2023). Lazard's Levelized Cost of Energy Analysis, Version 16.0. Lazard.
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