This week, the International Environmental Agency (IEA) released several blockbuster predictions for the next half decade of renewable energy development.
Data in the report, titled Renewables 2020, projects a 1,123 gigawatt (GW) increase in wind and solar. That would mean these power sources overtake gas capacity in 2023 and coal in 2024.
In their main case, the IEA has wind, solar, hydro and other renewable sources accounting for 95% of the increase in the world’s electricity generating capacity over the next five years. Solar capacity is set to be the key driver of this trend.
As CarbonBrief notes, 130GW of solar could be added each year between 2023-2025, rising to to 165GW in the accelerated scenario, which would account for nearly 60% of the total renewable expansion across this period. Electricity generation costs from utility scale solar are expected to fall 36% during that time.
In the IEA’s October World Energy Outlook, they anointed solar power the “new king” of global electricity markets after becoming the cheapest form of electricity in history.
For utility-scale solar projects completed this year, the average cost of electricity generation over the lifetime of the plant (called the levelized cost of electricity) was between $35 to $55 per MWh in some of the world’s biggest markets ― the US, Europe, China, and India. The cost for coal, in comparison, currently ranges between about $55 and $150 per MWh (megawatt hours).
Global solar panel demand will grow by around 15% and reach a total capacity of 143.7 GW in 2021, according to Taiwanese market research company PV Infolink. “China, which will enter the grid parity era under the 14th five-year plan, is expected to see 20% growth,” the PV Infolink experts said. “Europe, which is committed to the Paris Agreement, will see continued strong demand.” PV Magazine reports that the U.S. market is expected to see an increase in demand of 30% while the growth for India is predicted to be 60%.
Solar power capacity has already increased by 18 times since 2010 and wind power by four times, according to IEA data. Per Lawrence Berkeley National Lab’s 2020 update of utility-scale solar (ground-mounted solar projects larger than 5 megawatts) data and trends, more than 4.5 GW of utility-scale solar came on-line in 2019, bringing the United States’ cumulative capacity over 29 GW, according.
In early October, The Wall Street Journal reports that NextEra Energy Inc., the U.S.’s largest renewable-energy company, surpassed the market valuation of Exxon Mobil Corp. The shift was a milestone in a market trend that has been building for years. The biggest US company by market cap just seven years ago, Exxon has lost more than half of its value since then. NextEra shares, meanwhile, have more than tripled in the same period.
Under current political policies, 4,813 gigawatt hours (GWh) of additional solar generation is forecast from 2019-2040, a sevenfold increase on the growth solar has already seen, according to GreenTechMedia. Governments across the world have approved more than $50 billion of environmentally friendly stimulus measures this year.
However, many expect the election of Democratic Presidential Candidate Joe Biden to usher in a new era of pro-renewable energy policy. During the campaign, for example, Bloomberg notes that Biden said he’s aiming to eliminate carbon emissions from the US power sector by 2035. Hong Kong’s Daiwa Capital Markets forecasts US annual installations rising from about 12 gigawatts to 26 gigawatts over the next five years, which would push global demand growth to almost 20% a year, compared with 17.5% if US policy remained unchanged.
Per Biden’s campaign website:
“Biden believes the Green New Deal is a crucial framework for meeting the climate challenges we face. It powerfully captures two basic truths, which are at the core of his plan: (1) the United States urgently needs to embrace greater ambition on an epic scale to meet the scope of this challenge, and (2) our environment and our economy are completely and totally connected.”
While Republicans have already won 50 Senate seats in this year’s election cycle, and are expected to take at least one of the two remaining seats in Georgia to secure a simple majority, Biden will still have a certain amount of executive power to re-shape America’s energy infrastructure.
Even if the GOP does take the Senate majority, Barron’s writes that there is plenty that the Biden administration can do to advance its $2 trillion climate agenda. The former vice president aims to rejoin the Paris climate agreement, push the U.S. to achieve net-zero emissions by 2050, and promote development of battery storage, renewables, and electric vehicles, support for which might be wrapped up in an economic growth bill. Biden also plans to rescind a number of President Donald Trump’s executive orders on energy and rollbacks of environmental regulations