New additions of renewable power capacity worldwide will increase to a record level of almost 200 gigawatts (GW) this year, contrasting with the sharp declines triggered by the pandemic in other parts of the energy sector, said the International Energy Agency (IEA) in a new report.
This rise – representing almost 90% of the total expansion in overall
power capacity globally – is led by wind, hydropower and solar PV,
added the IEA’s Renewables 2020 report.
Wind and solar
additions are set to jump by 30% in both the United States and China as
developers rush to take advantage of expiring incentives.
Even
stronger growth is to come. India and the European Union will be the
driving forces behind a record expansion of global renewable capacity
additions of nearly 10% next year – the fastest growth since 2015 –
according to the report. This is the result of the commissioning of
delayed projects where construction and supply chains were disrupted by
the pandemic, and growth in markets where the pre-Covid project pipeline
was robust. India is expected to be the largest contributor to the
renewables upswing in 2021, with the country’s annual additions doubling
from 2020.
"Renewable power is defying the difficulties caused
by the pandemic, showing robust growth while other fuels struggle,”
said Dr Fatih Birol, the IEA Executive Director. "The resilience and
positive prospects of the sector are clearly reflected by continued
strong appetite from investors – and the future looks even brighter with
new capacity additions on course to set fresh records this year and
next.”
Over the first 10 months of 2020, China, India and the
European Union have driven auctioned renewable power capacity worldwide
15% higher than in the same period last year – a new record that shows
expectations of strong demand for renewables over the medium and long
term. At the same time, shares of publicly listed renewable equipment
manufacturers and project developers have been outperforming most major
stock market indices and the overall energy sector. By October, shares
of solar companies worldwide had more than doubled in value from
December 2019.
However, policy makers still need to take steps
to support the strong momentum behind renewables. In the IEA report’s
main forecast, the expiry of incentives in key markets and the resulting
uncertainties lead to a small decline in renewables capacity additions
in 2022. But if countries address these policy uncertainties in time,
the report estimates that global solar PV and wind additions could each
increase by a further 25% in 2022.
Critical factors influencing
the pace of deployment will be policy decisions in key markets like
China and effective support for rooftop solar PV, which has been
impacted by the crisis as households and businesses reprioritised
investments. Under favourable policy conditions, solar PV annual
additions could reach a record level of 150 gigawatts (GW) by 2022 – an
increase of almost 40% in just three years.
"Renewables are
resilient to the Covid crisis but not to policy uncertainties,” said Dr
Birol. "Governments can tackle these issues to help bring about a
sustainable recovery and accelerate clean energy transitions. In the
United States, for instance, if the proposed clean electricity policies
of the next US administration are implemented, they could lead to a much
more rapid deployment of solar PV and wind, contributing to a faster
decarbonisation of the power sector.”
The electricity generated
by renewable technologies will increase by 7% globally in 2020,
underpinned by the record new capacity additions, the report estimates.
This growth comes despite a 5% annual drop in global energy demand, the
largest since the Second World War.
However, renewables outside
the electricity sector are suffering from the impacts of the Covid
crisis. Biofuels used in transport are set to experience their first
annual decline in two decades, driven by the wider plunge in transport
fuel demand this year as well as lower fossil fuel prices reducing the
economic attractiveness of biofuels. Demand for bioenergy in industry is
also falling as a result of the wider drop in economic activity. The
net result of these declines and the growth of renewable power is an
expected overall increase of 1% in global renewable energy demand in
2020.
Renewable fuels for transport and industry are an area in
particular need of potential policy support, as the sector has been
severely hit by the demand shock caused by the crisis. More can and
should be done, to support deployment and innovation in bioenergy to
supply sustainable fuels for those sectors.
The report’s
outlook for the next five years sees cost reductions and sustained
policy support continuing to drive strong growth in renewable power
technologies. Total wind and solar PV capacity is on course to surpass
natural gas in 2023 and coal in 2024. Driven by rapid cost declines,
annual offshore wind additions are set to surge, accounting for
one-fifth of the total wind market in 2025. The growing capacity will
take the amount of renewable electricity produced globally to new
heights.
"In 2025, renewables are set to become the largest
source of electricity generation worldwide, ending coal’s five decades
as the top power provider,” said Dr Birol. "By that time, renewables are
expected to supply one-third of the world’s electricity – and their
total capacity will be twice the size of the entire power capacity of
China today.”
(TradeArabia News Service, November 12, 2020)
