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IEA says renewable power weathered Covid storm

22 November 2020 Kevin Adler

Although Covid-19 has upended almost every industry around the world, the renewable power industry has been remarkably resilient, according to the International Energy Agency (IEA) in its World Energy Outlook 2020, released in October.

Electricity demand will decline by about 2% in 2020, or almost 500 terawatt-hours (TWh), but it will rebound by 3% between 2020 and 2021 and set a new record. By 2025, global electricity demand will surpass 26,000 TWh, and it will reach almost 29,000 TWh by 2030.

"The Covid-19 crisis has underlined the importance of a reliable, affordable and secure electricity supply that is able to accommodate sudden changes in behavior and economic activity while continuing to support vital health and information services. The electricity sector will play a key role in supporting economic recovery, and an increasingly important long-term role in providing the energy that the world needs," IEA said.

IEA estimates that renewable energy production will increase by 65% from 2020 to 2030 and will account for 80% of all new energy demand growth in a baseline scenario forecast that assumes that by the end of 2021 the world economy will reach pre-pandemic levels. "By 2030, hydro, wind, solar PV, bioenergy, geothermal, concentrating solar and marine power between them provide nearly 40% of electricity supply. China leads the way, expanding electricity from renewables by almost 1,500 TWh to 2030, which is equivalent to all the electricity generated in France, Germany and Italy in 2019," IEA said.

"Solar PV becomes the new king of electricity supply and looks set for massive expansion," IEA said, adding that for projects where low-cost financing is available solar PV "is now the cheapest source of electricity in history."

Solar PV will grow by an average installed capacity of 13% annually from 2020 to 2030.

"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," said Dr. Fatih Birol IEA executive director. "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."

Coal, however, will be on the downside of the slope, with an 8% drop in coal-fired generation in 2020 and declines in future years. Coal will never return to its peak usage year of 2018, IEA said. "Coal's share of global electricity generation falls to 28% in 2030 in the STEPS, down from 37% in 2019 and 35% in 2020. Challenging market conditions contribute to 275 GW of coal-fired capacity retirements by 2025 (13% of the 2019 total), including 100 GW in the United States and 75 GW in the European Union, where 16 out of 27 EU member states aim to phase out all unabated coal," IEA said. Offsetting this to some degree will be 130 GW of new installations in China, India and Southeast Asia.

Posted 22 November 2020 by Kevin Adler, Editor, Energy and Natural Resources Group, IHS Markit

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