The past decade has been great for the growth of global renewable energy industry. With enhanced focus on sustainability, global leaders were able to increase investments in renewable energy, almost doubling its growth in the last ten years. As a result, renewable energy became more competitive in cost and witnessed a surge customer demand.
Europe used to be the global leader in renewable energy investment but was overtaken by China and US in the same time span. As per a publication by Bloomberg New Energy Finance, the U.N. and the Frankfurt School of Finance & Management, China saw the maximum acceleration – tripling its investment in renewable energy between 2009 and 2019. The data includes venture capital investments, R&A expenditure by governments and companies, private equity, public markets and the lion share invested in renewable energy installations and assets.
Several media reports indicate that Europe (particularly Germany, a former flag-bearer) experienced a steady decline of investments in wind power sector. Professor Dr. Ulf Moslener, an energy expert from the Frankfurt School of Finance & Management feels that the present breed of investors is not really interested in the long-term pull of alternate power generation.
Pre-Covid Industry Outlook
In the beginning of 2020, the scenario was quite positive for the sector as the sector was expected to surge faster. In April 2019, renewable energy accounted for 23% of total power generation in US, overtaking coal by 3%. 50% of US renewable energy came from wind and solar energy by the first half of 2019. Falling costs and increasing capacity of renewable energy sources found takers from both the residential and industrial sectors.
Renewable energy was in the midst of a new growth phase riding on four wheels – high customer demand, competitive cost, innovation and collaboration, when Covid-19 pandemic brought the world to a screeching halt. With global lockdowns in place, the sector experienced major disruptions and slowed down phenomenally. The sector is still struggling with the impact of the pandemic, but things are changing very rapidly. The last few months of the year could be extremely crucial for the sector and will depend on the variation of the pandemic situation.
Renewable Energy Industry Trends 2020
A new era of competition
As the renewables became more cost effective, the competition with traditional energy sources increased. Investors have already demonstrated a dearth of interest in traditional energy sources as the prospects become better for renewables. With an increased stress on sustainability, investors are more inclined towards renewables and the competition is expected to become stiffer now. Among the renewables, competition between different sources like solar and wind is also on the rise.
New offshore wind opportunities opening up
US offshore wind industry is spreading winds swiftly. A $2.8 billion project is already underway, and many such projects are expected to take shape soon. Several US-Europe joint ventures are also on the cards. Commitments worth millions of dollars in such projects have been announced by numerous US state departments and it is estimated that about 43,000 new jobs would be created in the offshore wind industry by 2030.
Increasing importance of renewables
There is an increasing demand of resiliency in the power sector. Increasing calamities like hurricanes, floods and wildfires have compelled authorities to invest in strengthening large grids. Solar PV and energy storage is being used to enhance resiliency. Regulators are interested in using microgrids as a non-wire alternative approach that would be more resilient and cost efficient.
Collaboration – vital to innovation in renewable sector
Despite the short-term setback, renewable energy sector is expected to be back in track in the long run because of the favorable consumer sentiment. People are looking for renewable energy alternatives and companies that seize the opportunity by offering innovative solutions rooted in fruitful collaborations will likely thrive in the coming time.
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