Solar energy expected to lead renewable surge in the next decade
Solar energy is expected to take a “starring role” in future energy supplies and it will lead a surge in renewable power supplies over the next ten years, the International Energy Agency has said.
In its latest annual World Energy Outlook report, the IEA says it expects global energy demand to have fallen by about 5 per cent in 2020, energy-related carbon dioxide emissions by 7 per cent, and energy investment by 18 per cent.
These decreases are predominantly due to the Covid-19 crisis which has caused “more disruption than any other event in recent history,” the Agency says, adding that it expects the impact of the virus to be felt for years to come.
In its analysis it found that solar PV is now consistently cheaper than new coal or gas-fired power plants in most countries, and solar projects now offer some of the lowest-cost electricity ever seen.
In one scenario, where Covid-19 is gradually brought under control in 2021 and governments stick to previously announced policy decisions, renewables are expected to meet 80 per cent of global growth in electricity demand over the next decade.
While hydropower remains the largest renewable source, solar is currently the main source of growth, followed by onshore and offshore wind.
In the UK, the price of offshore wind energy has plummeted so much in recent years that the Government expects to make some financial returns from operators due to so called negative subsidies.
The IEA says that whether the pandemic ultimately helps or hinders efforts to accelerate clean energy transitions and reach international climate goals will depend on how governments respond to today’s challenges.
“I see solar becoming the new king of the world’s electricity markets. Based on today’s policy settings, it is on track to set new records for deployment every year after 2022,” commented IEA executive director Dr Fatih Birol.
“If governments and investors step up their clean energy efforts in line with our Sustainable Development Scenario, the growth of both solar and wind would be even more spectacular – and hugely encouraging for overcoming the world’s climate challenge.”
The IEA is warning that the strong growth of renewables needs to be paired with robust investment in electricity grids. Without enough investment, grids will prove to be a weak link in the transformation of the power sector, with implications for the reliability and security of electricity supply.
Fossil fuels were also found to face varying challenges in the coming years, with demand for coal not expected to ever return to pre-crisis levels under expected scenarios.
Its share in the 2040 energy mix is anticipated to fall below 20 per cent for the first time since the Industrial Revolution. But the IEA anticipates significant growth for natural gas grows, mainly in Asia, while oil remains vulnerable to the major economic uncertainties resulting from the pandemic.
“The era of global oil demand growth will come to an end in the next decade,” Dr Birol said. “But without a large shift in government policies, there is no sign of a rapid decline. Based on today’s policy settings, a global economic rebound would soon push oil demand back to pre-crisis levels.”
While global emissions are expected to bounce back more slowly than after the financial crisis of 2008-2009, the world is still a long way from a sustainable recovery, the IEA concluded.
In June, BP announced that it would cut 15 per cent of its workforce due to pressures from the pandemic.
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