Wind and solar are growing at a ludicrous pace (just not yet enough to stop climate change)

There's great news and gloomy news on climate change in this hefty new report on wind, solar, and other renewables from the UN and Bloomberg New Energy Finance.

First, the confetti-tossing: Renewable energy — mainly solar and wind — has been growing at an astounding pace worldwide. Last year, countries plunked down $286 billion on renewable energy investments, twice what they spent on coal and gas. For the first time ever, renewables made up half of all new electric capacity installed worldwide, with 118 gigawatts coming online. Next time someone says renewables are a niche market, send them this PDF.

All in all, renewable energy (excluding large hydropower dams) provided 10.3 percent of the world's electricity in 2015, up from 9.1 percent the year before:

(Global Trends in Renewable Energy Investment 2016)

(If you include large hydropower, renewables made up roughly 22 percent of the world's electricity in 2015. If you include nuclear, that goes up to around 33 percent. The catch is that large hydro and nukes aren't growing as quickly.)

So now comes the dour "yes, but..." This breakneck growth still isn't fast enough to drive the sort of sharp CO2 reductions needed to address climate change. Not yet.

For one, the world is still erecting plenty of carbon-belching coal and gas plants. The fact that wind and solar remain pricey and don't run 24/7 means that there's still heavy demand for reliable fossil-fuel generation. The report estimates that countries added 43 gigawatts worth of coal capacity last year, on net, and 40 gigawatts worth of natural gas capacity. (For context: 15 gigawatts of new nuclear came online, as well as 22 gigawatts worth of large hydropower dams.)

As long as fossil fuel capacity keeps growing rather than shrinking, it will be tough to push down global CO2 emissions. That atmospheric bathtub will keep filling. The report notes that few forecasters think global power-sector emissions will peak before 2026.

Also, keep in mind this report is focused primarily on the electricity sector, which only accounts for around 40 percent of energy-related CO2 emissions. If you really want to lick global warming, you'd also need to clean up the transportation sector and figure out what to do about cement, steel, and other industries. There are heartening signs along those lines — the report details how battery prices keep plunging and electric vehicle sales keep expanding — but it's still early days yet.

So this tweet is still relevant:

In the big picture, there are some incredible things happening in the renewable energy sector. Truckloads of money are being tossed around. The hype is warranted. But we're still quite far from solving this nagging little climate change problem.

A few other cool charts from the renewables report

The full UN/BNEF report offers literally dozens of charts and graphs on renewable trends, but I'll just highlight a few that grabbed me.

1) Forget Europe. The real renewable action is happening in China.

Note that investment has actually been falling in Europe — long seen as a green leader. But it's absolutely soaring in China.

2) Despite the oil crash, electric vehicle sales are on the rise

Some 462,000 people bought electric vehicles last year — up 60 percent from the previous year — despite the fact that oil prices were plummeting. The US market has actually flatlined, but sales have been soaring in China and Europe. "Improvements in range, reductions in battery prices, and the availability of tax and other incentives, have combined with increasing familiarity to propel sales forward."

The big question is how far electric vehicles will go. Bloomberg New Energy Finance has predicted that 2 million electric cars will be sold in 2020. But the report notes that other forecasters have been less bullish.

3) Batteries keep getting cheaper and cheaper

If electric cars are ever to take off, we'll need cheap batteries. So it's good news that lithium-ion battery prices fell 35 percent last year.

4) Storage is booming, especially in the United States

For solar and wind to really expand, it'd be great to have large grid-scale storage that can smooth out fluctuations in generation. And there are signs this is happening. Last year, the world installed some 250 megawatts worth of new storage technologies (i.e., excluding pumped hydro and older lead-acid batteries). The fact that prices for lithium-ion batteries are dropping offers utilities more options here.

5) Fossil fuels are still cheaper than renewables+storage. Gotta fix that.

This chart shows the levelized cost of electricity for various energy technologies across different countries.

As you can see, wind electricity has already become cheaper than coal and gas in many places. And solar photovoltaics have been making stunning gains, with the price dropping by nearly two-thirds since 2009. In China and Germany, solar now beats natural gas.

The catch, though, is that solar and wind have intermittency issues that limit their reach. For those sources to truly dominate, they'll likely need to be paired with low-cost energy storage in the future. And that jumbles the economic calculus. Wind+storage is still more expensive than fossil fuels everywhere. Solar+storage is pricier. Getting those storage costs down will crucial.

Further reading: Have we hit "the end of the fossil fuel era"? Not even close.