Renewables power to record growth

Renewable power has grown significantly this year, as oil, gas and coal use have declined over he pandemic, according to a report from the International Energy Agency (IEA).

Globally renewable energy is set to increase to a record level of almost 200GW this year, the IEA’s Renewables 2020 report forecasts.

This rise, almost 90 per cent of the total expansion in overall power capacity globally, is led by wind, hydropower and solar PV. Wind and solar additions are set to jump by 30 per cent in both the US and China as developers rush to take advantage of expiring incentives.

But the IEA predicts that stronger growth is to come with India and the EU adding nearly 10 per cent more capacity next year – the fastest growth since 2015. 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.

Over the first 10 months of 2020, China, India and the EU have driven auctioned renewable power capacity worldwide 15 per cent 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, 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 per cent in global renewable energy demand in 2020.

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.

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