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IHS Markit sees strong 2021 global rebound for renewables

21 January 2021 Kevin Adler

A strong rebound in renewable generation installations, a continued surge in green hydrogen growth, and a focus on recycling are among the key themes in clean technology in 2021, according to IHS Markit.

"Annual solar installations are predicted to grow by over 30% in 2021 after volatile demand in 2020, triggered by the COVID-19 pandemic," IHS Markit said in a report on 21 January, Top Clean Tech Trends to Watch in 2021.

China will account for 35% of global solar installations in 2021, IHS Markit said, but the industry is much more geographically diverse than in 2010. "There are now 18 markets globally that have +1 GW cumulative solar installations, compared to just six a decade earlier," IHS Markit said.

Strong solar market demand comes despite an increase in production costs of up to 15% that is driving a surge in module prices, especially in the first quarter, it said. However, production costs are set to drop in the second half of the year, and this will lay the groundwork for record solar installations at the end of 2021.

"We will see for the first time a situation in which global demand grows over 30% despite high module prices in the first half of the year, which is unprecedented in the solar photovoltaic industry," said Edurne Zoco, executive director, clean energy technology, at IHS Markit.

As for wind, 2020 set a record for new installations, with IHS Markit tracking nearly 120 GW in activity. "Of this, nearly 60% was from mainland China, including projects that have secured subsidy entitlement. Annual onshore wind installations in 2021 will continue to be derived from installation rushes in markets facing imminent subsidy cuts," IHS Markit said.

Offshore wind deployment in 2021 could exceed 10 GW, nearly twice as much as last year, again driven by mainland China. But IHS Markit noted that over 20 GW worth of capacity is scheduled to be auctioned in the UK, France, Denmark, the Netherlands, Germany, the US, Japan, and Taiwan.

"Floating foundations, the future of offshore wind in deep waters, are finally moving into the commercial phase," observed Andrei Utkin, senior associate, clean energy technology. "The industry has proven the reliability of technology in a dozen pilot projects, and in 2021 for the first time commercial floating capacity will be allocated through auctions in the UK and France."

IHS Markit sees "exponential growth" in the project pipeline for hydrogen electrolysis projects this year. Costs to produce low-carbon and no-carbon hydrogen could fall by 40% through 2025, according to IHS Markit, due to the falling cost of electricity sourced from renewable generation and the price decline expected in electrolysis technology as it is scaled-up.

"The record growth last year in 'green hydrogen' installations-hydrogen produced via electrolysis of water using renewable power-will continue throughout 2021 as plans begin to increasingly translate into concrete action," said Soufien Taamallah, director, clean energy technology.

Other trends

In another trend to watch this year, "nonconventional" renewables such as geothermal will generate increasing attention from conventional energy companies and investors. "Nearly 0.5 GW of new geothermal capacity is expected to be commissioned throughout 2021, with Indonesia and Kenya leading the global market," IHS Markit said.

Innovation is driving down the cost of installations, at the same time that new efficiency records are being set, with IHS Markit citing Spain, India, and the Middle East region as having the lowest solar levelized cost of electricity in the year ahead. "Average module efficiency records continue to increase, surpassing 22.5% in PERC monocrystalline cell commercial production and are forecast to reach 24% by 2022," it said.

And the future is bright, as IHS Markit identified the emerging perovskite technology as "a promising solar cell technology development with significant potential to increase cell efficiencies and reduce costs," though it said that commercial production is about five years in the future. Perovskite solar cells are based on calcium titanium oxides.

Finally, the successful deployment of renewable technologies is now creating new issues related to disposal and end-of-use that IHS Markit said will gain in significance in 2021. "New policies for battery recycling will be led by the automotive industry, spurred on with a sense of urgency due to the shorter life cycle of batteries compared to solar panels and wind turbines and the scale of the EV sector," it said.

Onshore wind operators also will have to wrestle with disposal issues. "With over 20 GW of the installed onshore wind fleet globally exceeding their 20-year design life in 2021, decisions about repowering, decommissioning, or extending life of existing capacity will play a growing role in mature markets," said Indra Mukherjee, senior analyst, clean energy technology, adding that Germany, for example, will see subsidies for more than 6 GW of capacity end this year.

Posted 21 January 2021 by Kevin Adler, Editor, Climate & Sustainability Group, IHS Markit

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