- 2020 has been a banner year of renewable energy developments, which have grown even as overall energy demand shrank during the COVID-19 pandemic
- Government initiatives and investor interest is helping to fuel a major expansion in renewable energy projects
- International Energy Agency predicts that renewables will surpass coal as the largest source of energy by the year 2025
The resiliency of the renewable energy market, coupled with government support and investor interest, has fueled a boom in clean energy this year, according to a report by the International Energy Agency.
The report found that about 90 percent of the power capacity added this year came from renewable sources, namely wind, solar, and hydroelectric. While overall global energy demand fell 5 percent during the COVID-19 pandemic, consumption of electricity from renewable sources is set to grow by 7 percent.
India is expected to double its renewable energy contributions in 2021, with the United States and China increasing their wind and solar generating facilities by 30 percent. In the U.S., the accelerated pace is due in part to developers capitalizing on government incentives before they expire. The IEA says the world is set to add nearly 4 percent to its capacity to generate power from renewable sources in 2021, with this share increasing to 10 percent in 2022.
If the pace holds, the IEA forecasts that renewables will experience a 50 percent expansion by 2025 and supply about one-third of global electricity. This would make clean energy sources the largest supplier of electricity in the world, supplanting coal.
The IEA says government support is crucial to the continuing growth of renewable energy, with many nations pledging the greater adoption of clean energy as part of an effort to combat climate change. It notes how solar and wind projects could be deployed more rapidly if President-elect Joe Biden’s clean electricity policies are put into effect in the United States. Biden has set a goal of decarbonizing the U.S. energy by 2035 and achieving net-zero emissions in the nation by 2050.
While renewable energy has not been exempt from problems caused by the COVID-19 pandemic, it has shown greater resiliency than other areas of the energy sector and proved attractive to investors. Oil companies have also started to increase their investments in renewable energy, including a recent preliminary agreement between BP and the offshore wind developer Orsted to develop a pilot plant to generate hydrogen, an emissions-free fuel that could replace fossil fuels in areas like transportation and heavy industry. The IEA anticipates that oil companies will increase their investments in renewables tenfold over the next five years.
