Before the advent of COVID-19, the renewable energy sector (wind, solar, and hydropower) was booming globally. Whether renewables can maintain their robust growth in the face of this crisis remains uncertain, but even in the face of the coronavirus pandemic, some experts maintain that this sector might just be the salvation of the energy industry.
According to data released by the International Renewable Energy Agency (IRENA) last week, over three-quarters of the world’s electricity is now coming from renewable sources. Even though new renewable energy capacity construction slowed a bit from 2018 to 2019, since there was also less new fossil fuel infrastructure being built, renewables’ share in energy expansion expanded.
Based on the IRENA report, the renewable energy sector added 176 gigawatts of capacity last year. A gigawatt is roughly sufficient to supply the energy needs of a city of 500,000. While more than half of the new capacity is reported to have come online in Asia, Europe and North America are not far behind.
“It is clear that many countries and regions recognize the degree to which the energy transition can deliver positive outcomes,” Francesco La Camera, IRENA’s director-general said in a statement.
Will Young and Strong Win the Day?
Experts acknowledge that the COVID-19 pandemic and the collapse of global oil markets have thrown forecasts for future renewable energy growth into turmoil, but many of these remain optimistic. Until the oil price collapse decimated Texas’ shale oil regions, large scale wind projects were being installed to supply the energy needs of the fracking industry.
And while oil is trading at multi-year lows, natural gas—which powers most new fossil-fuel generation—hasn’t seen prices fall as much and, according to The New York Times, in parts of the U.S., wind and solar power is cheaper than natural gas and coal.
As the global economy attempts to recover from the pandemic’s shutdowns, IRENA’s La Camera noted that “Governments can turn to a renewables-based energy transition to bring a range of solutions at this difficult moment. Many renewable technologies can be ramped up relatively quickly, helping to revive industries and create new jobs.”
While IRENA acknowledged that the renewable energy sector did suffer its first slowdown on record during 2019, the growth in renewable energy was still far ahead of growth in fossil fuels—something that has been true for the past five years. Overall, renewable energy now accounts for almost 35% of global power capacity, up from 33.3% a year earlier.
However, there was reportedly a lot of variance by region. As noted, more than half the new capacity was added in Asia. Like most parts of the world, it saw renewables account for at least 70% of total capacity expansion. As reported by Forbes, “There were two laggards though. In Africa, the proportion was only just over half, at 52%, while in the Middle East it was just 26%.”
As in previous years, a small number of renewable technologies dominated. Solar and wind accounted for 90% of renewable capacity added in 2019. There was 98 GW of solar power added to the world’s energy mix, along with 60 GW of wind power. Between them, these two technologies generate almost half of all renewable energy around the world, with 23% for solar and 25% for wind, but hydropower remains the dominant energy source with 47% of the total.
Future Sluggishness a Possibility
Even the optimists are offering cautionary advice, however. In a statement last month, La Camera said that the coronavirus crisis is indeed presenting the renewable industry with a challenge. “The outbreak of COVID-19 threatens global supply chains in many sectors and is therefore likely to have an impact on renewable energy,” La Camera said. “The severity and duration of both situations remains to be seen.”
Growth may well be slower again in 2020 as a result of the coronavirus pandemic, according to the IRENA report, citing that it is causing economic upheaval around the globe and is dramatically reducing demand for electricity. Low prices for conventional fuels are also dampening the urgency for governments to switch to cleaner sources of energy. Wood Mackenzie, an Edinburgh-based energy consultancy, has cut its forecast additions of wind energy capacity for 2020 by 4.9 GW and of solar installations by 23.1 GW. It has also forecasted that electric vehicle sales will drop by 43% in 2020.
IRENA maintains that the employment outlook for renewables remains strong, however, with employment in the sector hitting 11 million jobs globally in 2018. They say that this number could quadruple by 2050, with another 40 million jobs in supporting businesses and industries.