Renewables like solar and battery storage continue to replace fossil fuels to power humanity the world over. This article by Forbes reviews the 2020 Global Trends in Renewable Energy Investment report and grades our progress on renewable energy goals and reductions in carbon emissions.
The Covid-19 pandemic has hit the fossil fuel industry hard, but renewable energy is more cost-effective than it has ever been, offering an opportunity to decarbonize the global energy system and bring the world closer to meeting its climate targets.
A new report, Global Trends in Renewable Energy Investment 2020, produced by the UN Environment program (UNEP), the Frankfurt School-UNEP Collaborating Centre and BloombergNEF (BNEF), shows that:
- 184GW of clean power capacity was added in 2019, a 20GW jump from 2018’s 164GW
- This new capacity was delivered with almost the same investment as 2018 – $282.2 billion – demonstrating how costs continue to fall in the sector
- 826GW of new non-hydro renewable power is planned by 2030, at a likely cost of around $1 trillion. This is less than the 1,200 GW added in past decade and far short of what is needed to meet the targets of the Paris Agreement on climate change.
To limit global temperature rise to under 2°C – the main goal of the Paris Agreement – would require around 3,000GW of new capacity by 2030. Current planned investments also fall far below the $2.7 trillion that was spent on renewables during the last decade.
However, with the cost of installing renewable energy has hit new lows, future investments will deliver far more capacity per dollar spent. The 184GW in new capacity was a new record by 12% in terms of gigawatts but came at a cost just 1% higher than 2018’s investment.
This is because the all-in, or levelized, cost of electricity continues to fall for wind and solar, thanks to advances in technology, economies of scale as more plants are built and fierce competition in auctions for new renewable capacity. “Costs for electricity from new solar photovoltaic plants in the second half of 2019 were 83 percent lower than a decade earlier,” BNEF says.
As a result, “the chorus of voices calling on governments to use their COVID-19 recovery packages to create sustainable economies is growing,” says Inger Andersen, Executive Director of UNEP. “This research shows that renewable energy is one of the smartest, most cost-effective investments they can make in these packages.
“If governments take advantage of the ever-falling price tag of renewables to put clean energy at the heart of COVID-19 economic recovery, they can take a big step towards a healthy natural world, which is the best insurance policy against global pandemics.”
Almost four fifths of new electricity generating capacity installed in 2019 was renewable. “Renewables such as wind and solar power already account for almost 80 percent of newly built capacity for electricity generation,” said Svenja Schulze, Germany’s minister of the Environment, Nature Conservation and Nuclear Safety. “Investors and markets are convinced of their reliability and competitiveness.
“The promotion of renewables can be a powerful engine for the recovery of the economy after the Coronavirus crisis, creating new and secure jobs,” she added. “At the same time, renewables improve air quality thus protecting public health. By promoting renewable energies within the framework of Coronavirus economic stimulus packages, we have the opportunity to invest in future prosperity, health and climate protection.”
The report highlights a host of other records that were broken in 2019, including:
- The highest solar power capacity additions in one year, at 118 GW
- The highest investment in offshore wind in one year, at $29.9 billion, up 19% year-on-year
- The largest financing ever for a solar project, at $4.3 billion for Al Maktoum IV in the United Arab Emirates
- The highest volume of renewable energy corporate power purchase agreements, at 19.5GW worldwide
- The highest capacity awarded in renewable energy auctions, at 78.5GW worldwide
- The highest renewables investment ever in developing economies other than China and India, at $59.5 billion
- A record 21 countries and territories investing more than $2 billion in renewables.
The success of the renewables sector contrasts with the fossil fuel sector’s troubles during the Covid-19 crisis, which has seen demand for coal- and gas-fired electricity fall in many countries along with a slump in global oil prices, says Nils Stieglitz, president of Frankfurt School of Finance & Management. “We see the energy transition is in full swing, with the highest capacity of renewables financed ever. The climate and COVID-19 crises – despite their different natures – both demonstrate the need to increase climate ambition and shift the world’s energy supply towards renewables.”
The 2019 investment brought the share of renewables, excluding large hydro, in global generation to 13.4%, up from 12.4% in 2018 and 5.9% in 2009. This means, the report says, that in 2019, renewable power plants prevented the emission of an estimated 2.1 gigatonnes of CO2, a substantial saving given the global power sector emitted around 13.5 gigatonnes in 2019.
“Clean energy finds itself at a crossroads in 2020,” said Jon Moore, Chief Executive of BloombergNEF. “The last decade produced huge progress, but official targets for 2030 are far short of what is required to address climate change. When the current crisis eases, governments will need to strengthen their ambitions not just on renewable power, but also on the decarbonization of transport, buildings and industry.”
This article was written by Mike Scott from Forbes and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com.
