Stronger than ever appear the Renewable Energy Sources (RES) despite – or perhaps because of – the pandemic. According to the IEA’s Renewable Energy Market Update 2021, which is published today, renewably-generated electricity expanded at the fastest rate in 20 years in 2020, with solar and wind becoming the “new normal” as we go forward.
Among the highlights of the report, there are a few things that stand out:
- In 2020, annual renewable capacity additions increased 45% to almost 280 GW – the highest year-on-year increase since 1999.
- Exceptionally high capacity additions become the “new normal” in 2021 and 2022, with renewables accounting for 90% of new power capacity expansion globally.
- Solar PV development will continue to break records, with annual additions reaching 162 GW by 2022 – almost 50% higher than the pre-pandemic level of 2019.
- Global wind capacity additions increased more than 90% in 2020 to reach 114 GW. While the pace of annual market growth slows in 2021 and 2022, it is still 50% higher than the 2017-2019 average.
From on the above, we can easily deduct that wind and solar generation are the frontline soldiers in our battle against climate change and carbon neutrality. And that, even when IEA predicts a slight slowdown in market growth, we still have reasons to be optimistic.
Furthermore, when it comes to specific countries, the IEA report highlights:
- Annual growth in the People’s Republic of China’s renewables market will decelerate following the exceptional expansion that resulted from developers rushing to complete projects before subsidy phase-outs. However, the rest of the world compensates for China’s slowdown and maintains the pace of renewables expansion.
- Europe’s capacity growth accelerates thanks to further policy support and a booming corporate PPA market as PV costs continue to decline.
- The updated forecast for the United States is more optimistic because of federal tax credit extensions. New US emissions reduction targets and the infrastructure bill, if passed, will boost renewables expansion after 2022 (beyond the timeframe of this forecast update).
- Although India’s capacity additions in 2020 declined almost over 50% from 2019, the country is expected to set new records for renewables expansion in 2021 and 2022 as delayed projects from previous competitive auctions are commissioned.
This shift from conventional power generation to renewable sources is absolutely necessary. It is a key factor of global efforts to reach carbon neutrality and of course fundamental to the EU Commission’s Green Deal aspirations. However – and believe me, there is always a ‘however or two’ when it comes to renewables and carbon neutrality – there are a couple of things that we need to consider before we start celebrating.
First of all, the grid infrastructure. Will this refreshing and promising prediction of IEA, which celebrates renewables as the “new normal”, be accompanied by an equally refreshing and promising increase in government and private investments regarding grid infrastructure? Because, as we all know, in order to introduce more renewable energy in our power grid, we do need an updated grid infrastructure. Not all countries can afford such an upgrade. Who is going to fund them then?
And secondly, as another IEA report demonstrates, energy-related CO2 emissions are on the rise this year. In fact, they are on course to surge by 1.5 billion tonnes in 2021. According to the IEA, this is going to be the second-largest increase in history. And this is happening because there is a strong rebound in demand for coal in electricity generation too. In short, IEA estimates that, in the end, CO2 emissions will increase by almost 5% this year. Will that be enough to undermine the promising predictions regarding renewables? What do you think?
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Editor, Smart Energy International