!-- Hotjar Tracking Code for www.pimagazine-asia.com -->
You Are Here: Home » News » Will Solar be crowned King?

Will Solar be crowned King?

Solar is likely to be the new king in the world’s electricity market, and India could be a leading market for utility-scale battery storage, says International Energy Agency’s latest World Energy Outlook 2020. The report focuses on the pivotal period of the next ten years, exploring different pathways out of the current coronavirus crisis.

The new report provides the latest IEA analysis of the pandemic’s impact: global energy demand is set to drop by 5% in 2020, energy-related CO2 emissions by 7%, and energy investment by 18%. The approach compares different scenarios that show how the energy sector could develop over the years.

Solar is the new king

Solar PV is estimated to grow by an average of 13% per year between 2020 and 2030, while meeting around one-third of the world’s electricity demand. Thanks to widely available resources, declining costs and policy support across 130 countries, solar PV generation would exceed pre-pandemic levels by 2021 and break new records each year starting from 2022, claims the report.

Change in Global Electricity Generation by Source and Scenario 2000-2040

“I see solar becoming the new king of the world’s electricity markets. Based on today’s policy settings, it is on track to set new records for deployment every year after 2022. If governments and investors step up their clean energy efforts in line with our Sustainable Development Scenario, the growth of both solar and wind would be even more spectacular – and hugely encouraging for overcoming the world’s climate challenge,” said Dr. Fatih Birol, the IEA Executive Director.

According to the report, solar PV is more cost-effective than coal and gas-fired power energy in many countries, including in the largest markets such as the United States, European Union, China and India.

India generated 50.1 billion units (BU) of solar FY 2019-20. This was a growth of 28% year-over-year compared to the FY 2018-19, where the total solar energy generated was 39.3 BUs.

The World Energy Outlook report covers four scenarios- 

  • Under the Stated Policies Scenario (STEPS), COVID-19 is eventually brought under control in 2021, and the world economy marks its return to pre-crisis levels in the same year.
  • Meanwhile, the Delayed Recovery Scenario (DRS) assimilates the same policy assumptions as STEPS; however, the global economy returns to its pre-crisis size in 2023, causing lasting damage to economic prospects. Under DRS, COVID would have ushered in a decade with the lowest energy demand growth rate since the 1930s.
  • Under Sustainable Development Scenario (SDS), the world will witness a surge in clean energy policies and investment. It would be on track to fully achieve sustainable energy objectives, including the Paris Agreement, energy access and air quality goals. Meanwhile, SDS considers the same assumptions on public health and the economy as STEPS.
  • The Net Zero Emissions by 2050 (NZE2050) scenario is an extension of the SDS analysis, as several countries and companies are aiming for net-zero emissions, 2050. These goals are attained under SDS, which will set global emissions towards net-zero by 2070.

Renewables take starring roles in all our scenarios, with solar at the center stage. However, the report observes that renewables’ strong growth needs to be paired with robust investment in electricity grids. Without enough investment, grids will prove to be a weak link in the transformation of the power sector, with implications for the reliability and security of electricity supply.

Before the pandemic, energy demand was expected to grow by 12% between 2019 and 2030. However, growth over this period is now 9% in the STEPS and only 4% in the DRS. With the power demand in advanced economies on a declining trend, India and other emerging and developing economies will push the demand, according to the IEA.

Under STEPS, global electricity demand recovers and surpasses pre-COVID-19 levels in 2021. Meanwhile, India’s electricity demand growth outpaces other regions to 2030, followed by substantial growth in Southeast Asia and Africa. However, China would witness the largest absolute increase in demand, accounting for over 40% of the global growth to 2030, the report added.

Change in Primary Energy Demand by Fuel and Region

Coal loses its edge

The report claims that coal in the power and industry sectors would continue to grow in India, Indonesia and Southeast Asia, but slower than previously projected.

In 2020, coal-based power generation recovers from an 8% drop and remains at the same range or lower through to 2030 than in pre-crisis levels due to a combination of expanding renewables, cheap natural gas and coal phase-out policies. According to the report, in advanced economies, coal demand in 2030 would be nearly 45% lower than in 2019.

Worldwide coal departure would be offset by new additions until 2025, as 130 GW of capacity is under construction, mostly in China, India and Southeast Asia. The global CO2 emissions from the power sector would edge close to 13 gigatons by 2024 and stabilize to 2030, but would never return to pre-crisis levels.

The report expects coal’s share in global electricity generation to fall to 28% in 2030 in STEPS, down from 37% in 2019 and 35% in 2020. However, emissions would drop by 38% from 2020 to 2030 in the SDS, noted the report.

The report indicates that international coal trade is further squeezed by efforts to boost domestic output in China and India – the two largest coal importing countries. Under STEPS, India is the only country that sees growth in coal production, with Australia and Russia faring far better than the other exporters.

In a previous report, the agency said that until mid-April 2020, countries under complete lockdown due to coronavirus experienced a decline of 25% in energy demand per week. Whereas, in countries that were under partial lockdown, the fall was 18% on average. The report added that in Q1 2020, the global demand for renewable energy in all sectors increased by about 1.5% relative to Q1 2019. According to the report, electricity generated from renewable sources increased by almost 3%, mainly because of new wind and solar PV projects completed last year. The report noted that the increase in renewable electricity generation happened after more than 100 GW of solar PV, and nearly 60 GW of wind power projects were completed in 2019.

The report cautioned that though the global emissions are set to bounce back more slowly than after the financial crisis of 2008-2009, the world is still a long way from a sustainable recovery. A step-change in clean energy investment offers a way to boost economic growth, create jobs and reduce emissions. The report also noted that this approach has not yet featured prominently in plans proposed to date, except in the European Union, the United Kingdom, Canada, Korea, New Zealand and a handful of other countries.

Leave a Comment

© 2020 POWER INSIDER PUBLISHING & EVENTS LIMITED - ALL RIGHTS RESERVED

Scroll to top