Renewable energy systems boom despite Covid-19
Renewable power is growing robustly around the world, especially in Europe, contrasting with the sharp declines triggered by the Covid-19 crisis in many other areas, says the International Energy Agency (IEA).
Growth this year of 200GW of capacity is being driven by China and the United States as developers rush to take advantage of expiring incentives but even stronger growth is to come from Europe and India to 2025.
“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 Fatih Birol, Executive Director of the IEA. “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.”
For the first time the IEA has also made its data available through a Data Explorer.
Europe and India will drive growth of 10 percent 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 growth in renewables 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 Birol. “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.”
Next: Policy risks to manufacturers
Over the first 10 months of 2020, China, India and the European Union have driven auctioned renewable power capacity worldwide 15 percent higher than in the same period last year, a new record. 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.
However, policy makers still need to take steps to support the strong momentum behind renewables. The report highlights 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 percent in 2022.
Rooftop solar PV has been impacted by the crisis as households and businesses reprioritised investments but under favourable policy conditions, solar PV annual additions could reach a record 150GW 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 report’s outlook for the next five years sees cost reductions that will lead to total wind and solar PV capacity overtaking natural gas in 2023 and coal in 2024.
The report is at www.iea.org/reports/renewables-2020
The data explorer is at www.iea.org/articles/renewables-2020-data-explorer
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