Renewable energy’s likelihood of increasing during a pandemic was not anticipated. According to a new analysis from the International Energy Agency, renewable energy sources such as wind and solar expanded at their quickest rate in two decades in 2020, and are expected to increase at a significantly quicker rate in the next years than before the pandemic. Growth in Europe and the United States will be even brisker than previously predicted.
The amount of renewable electricity capacity added in 2020, according to the IEA’s latest market assessment, increased by 45 percent to 280 gigawatts (GW), the biggest year-on-year rise since 1999. That additional power is equal to ASEAN’s entire installed capacity, which is made up of ten dynamic economies in Southeast Asia. Despite the reduction in China following an unprecedented level of additions last year, the rise in 2020 was set as the “new normal,” with around 270 GW of renewable capacity on track to be installed in 2021 and almost 280 GW in 2022.
Even as the pandemic spread macroeconomic uncertainties and curtailed demand, those forecasts have been revised upwards by more than 25 percent from IEA’s previous estimates in November, as governments around the world auctioned record levels of renewable capacity and companies signed record-level power purchase agreements.
While shifting electricity generation to renewable sources is an important part of the global drive to achieve carbon neutrality, CO2 emissions are expected to climb this year 2021, due to an increase in coal use, highlighting the need for big policy reforms and clean energy investments to meet climate targets.
“Wind and solar power are giving us more reasons to be optimistic about our climate goals as they break record after record. Last year, the increase in renewable capacity accounted for 90 percent of the entire global power sector’s expansion,” said Fatih Birol, the Executive Director of the IEA.
“Governments need to build on this promising momentum through policies that encourage greater investment in solar and wind, the additional grid infrastructure they will require, and in other key renewable technologies such as hydropower, bioenergy, and geothermal. A massive expansion of clean electricity is essential to giving the world a chance of achieving its net zero goals.’’
Last year, global wind capacity additions nearly doubled to 114 GW. In 2021 and 2022, growth will decelerate slightly, but the rises will still be 50 percent higher than the average expansion from 2017 to 2019. Solar PV installations are expected to break new milestones in the coming years, with yearly additions expected to exceed 160 GW by 2022. That would be about 50% more than the level reached in 2019 before the epidemic, confirming solar’s status as the “new king” of global electricity markets.
For several years, China has been at the core of global renewable demand and supply, accounting for roughly 40 percent of worldwide renewable capacity growth. Due to a rush to complete projects before government subsidies were taken out, China’s stake increased to 50 percent in 2020 for the first time.
Renewable growth in China is expected to stabilize in 2021-22, falling short of the record established in 2020 but still more than 50 percent higher than it was in 2017-19. Any future slowdown in China will be offset by significant growth in Europe, the United States, India, and Latin America, where government backing and lowering prices for solar PV and wind continue to drive installations.
China is the leading producer of solar panels and wind turbines, as well as the world’s largest supplier of the raw materials used to make them, such as silicon, glass, steel, copper, and rare earth elements. PV module prices have lately risen due to supply chain bottlenecks, including a fire at a Chinese silicon facility last year, underscoring the sector’s potential vulnerabilities in the long run.
The extension of federal tax subsidies is driving renewable capacity growth in the United States this year and the next. The prediction excludes the Trump administration’s new carbon reduction targets and infrastructure program. If passed, the measure would result in a significant increase in renewable energy deployment after 2022.
Last year, for instance, India’s capacity additions fell by nearly half compared to the previous year. However, growth is likely to pick up, with renewable expansion anticipated to hit new highs by 2022, thanks to the completion of long-delayed projects. However, the current increase in Covid 19 cases in India has thrown this year’s forecast into doubt.
As a result of the pandemic, global transport biofuel production fell by 8 percent in 2020. As biodiesel and hydro-treated vegetable oil (HVO) production grows globally and ethanol production expands in India, production is likely to rebound to 2019 levels this year and grow another 7 percent in 2022.
However, the lingering impacts of the Covid-19 crisis on demand, as well as price rivalry for sugar cane from Brazilian sweetener manufacturers, kept ethanol production in both the US and Brazil below 2019 levels. At the same time, worldwide HVO production capacity is predicted to nearly double in the next two years, allowing biofuels to be produced from waste and residual feedstocks for the first time.