TOKYO: Power generation amounts (see below) created through renewable energy sources are growing rapidly around the world, largely due to international efforts to combat global warming and a dramatic reduction in power generation costs. Urgent action is needed in Japan, where delays in measures to expand the use of renewable energy appear likely to have a negative impact on Japan’s business environment. At an International Renewable Energy Agency (IRENA) assembly in Abu Dhabi in mid-January, IRENA Director General Adnan Amin pointed to the rapid progress of renewable energy around the world, saying the international community has entered a new era of energy conversion. In the World Energy Outlook released by the International Energy Agency in November, renewable energy sources accounted for 24 percent of global power generation amounts in 2016. This is estimated to increase to 40 percent in 2040 (see chart 1). Renewable energy use is expanding to meet rapidly growing demand stemming from the economic development of emerging nations. Thermal and nuclear power will still play a major role in 2040, but power generated by renewable sources will be 2.6 times the level in 2016. The rapid increase in power generated by renewables is due to the need to comply with the Paris Agreement, an international framework for combating global warming, coupled with a dramatic reduction in costs. Converted into Japanese yen, the global average cost of generating solar power was about ¥35 per kilowatt-hour around 2010. This fell to about ¥10 in 2017. Prices for solar panels, among other things, have fallen as a result of technological innovations and mass production, while competition among companies has intensified. Among large-scale solar power projects in areas like the Middle East, there have been a number of cases in which the winning bid featured a generation cost of as little as ¥3 per kilowatt-hour. According to IRENA, even if the global average cost of thermal power generation falls to between ¥3 and ¥10 per kilowatt-hour, renewables are expected to become comparable to thermal power dropping to about ¥3 or lower by 2019 through efficient land-based wind and solar power generation. Global investment in renewable energy in 2016 totaled about ¥30 trillion, double the about ¥14 trillion (see chart 2) invested in thermal and nuclear power. Countries such as Britain, Denmark and Germany are devoting efforts to offshore wind power, which efficiently generates a large amount of electricity. The London Array, an offshore wind power station near the Thames estuary that began operating in 2013, has 175 3.6-megawatt (3,600-kilowatt) windmills with a generation capacity of up to 630 megawatts. Europe’s wind power generators have become larger in recent years, and the number of giant windmills with 8-megawatt-class power generation standing at over 200 meters tall is increasing. A major drawback of renewable energy sources, excluding hydro and geothermal power, is that output tends to be unreliable. Solar power stations can hardly produce any power at night, whereas the capacities of wind power stations fall in weak wind. Momentary shortages of electricity can lead to blackouts, which are a concern for every country. Germany’s north is suited to wind power generation, yet the power grid linking that area to the south lacks sufficient capacity, resulting in poor distribution in the south, where demand is high. Consequently, Germany sells excess power to neighboring countries. Nevertheless, European countries are working to upgrade their power grids and plan to utilize large amounts of renewable energy. For example, Spain introduced a system to stabilize its power grid by using IT to predict wind and solar power output based on weather information. European governments have set targets for large-scale use of renewable energy. It is significant that they are taking a leading role in conducting preliminary surveys for projects and coordinating with relevant local areas. Through efforts to improve the business environment and promote cost reduction, renewables have become a competitive energy source, creating a cycle that attracts further investment and expands growth.