Renewable energy has accounted for 90% of new electricity generation so far this year, according to an analysis by the International Energy Agency (IEA).
The resilience of renewable energy production goes against other energy and economic trends seen amid the COVID-19 pandemic, such as the cratering of demand for fossil fuels. The IEA argues that renewable sources will overtake fossil fuels as the dominant form of electricity generation in the world by 2025.
“Renewable power is defying the difficulties caused by the pandemic, showing robust growth while other fuels struggle,” said Dr. Fatih Birol, the IEA executive director, in a press release. “The resilience and positive prospects of the sector are clearly reflected by continued strong appetite from investors — and the future looks even brighter with new capacity additions on course to set fresh records this year and next.”
The first several months of the year saw a sharp decline in renewable energy additions worldwide due to the strict COVID-19 lockdown measures that prevented projects from being carried out. As these measures have eased, countries have raced to take advantage of financial incentives that will expire by year’s end, IEA notes.
China and the US, for example, have rushed to fulfill renewable energy goals for this year because of attractive financial incentives. Both countries are expected to grow their solar and wind capacity by 30% this year, according to the IEA.
What this means, essentially, is that renewable energy growth depends on friendly government policy. World leaders can maintain and enact new policies that will significantly accelerate renewable energy installation in the years ahead.
“Renewables are resilient to the COVID crisis but not to policy uncertainties,” said Dr. Birol in the press release. “Governments can tackle these issues to help bring about a sustainable recovery and accelerate clean energy transitions. In the United States, for instance, if the proposed clean electricity policies of the next US administration are implemented, they could lead to a much more rapid deployment of solar PV and wind, contributing to a faster decarbonisation of the power sector.”
Throughout the first 10 months of the year, China, India, and the US have driven auctioned energy capacity — energy that is planned for the future — by 15% compared to the year before, and stocks for renewable energy have vastly outperformed the stock market as a whole, according to the IEA.
In the years ahead, India is expected to lead countries in new renewable energy production due to incoming policies.
Once the pandemic subsides, renewable energy capacity could get a boost from the rollout of green economic recovery plans that will unleash trillions of dollars in new investments for sustainability programs.
“In 2025, renewables are set to become the largest source of electricity generation worldwide, ending coal’s five decades as the top power provider,” said Dr. Birol. “By that time, renewables are expected to supply one-third of the world’s electricity — and their total capacity will be twice the size of the entire power capacity of China today.”