Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

3D wind turbines in the sea against a sunset sky

Covid-19 badly impacted all economic activity around the world, and International Energy Agency’s (IEA) earlier assessment showed deployment of renewable energy was also expected to be affected. However, the latest IEA report found that although the pandemic hurt the growth, it couldn’t halt the rise of renewables.

Renewable energy sources, especially the solar and wind energy industries, are thriving globally as infrastructure projects transition online and most countries prioritize carbon-neutrality and set higher goals for net-zero emissions in future years. According to the latest IEA findings, solar and wind energies are expected to surpass traditional fossil fuels in less than next five years.

The current power capacity of wind and solar energy globally is estimated to double and reach 2400 gigawatts by 2025, suggests IEA findings. It would then outpace world’s natural gas (forecasted to be roughly 2100 gigawatts) and coal (forecasted to be roughly 2000 gigawatts) capacity by 2025. According to the data from 2019, the combined capacity of coal and natural gas energy was more than three times the capacity of the global solar and wind energy, reports Statista.

The freeze on economic activities due to the Covid-19 lockdowns have hurt the traditional fossil fuels badly. The value of coal and natural gas have dropped sharply in 2020 as their demand dwindled due to pausing of commercial production and other disruptions caused by the pandemic. As the electricity consumption of the world declined considerably, coal, which started the year with a downward trend, was worst impacted.

With increasing focus on green energies at the global level, most countries are swiftly divesting from coal in favor of natural gas, wind and solar energy. Analysts suggest that given the global trends against coal, it might not be very long before this traditional fossil fuel is officially eliminated from world’s most important power supplies.

At the other end of the spectrum, wind and solar energy are rapidly covering ground to fill the void created by coal. Even the pandemic couldn’t stall the growth of wind and solar energy generation. By 2021, renewables capacity is expected soar by 10%. India is projected to be the largest contributor to the surge of renewables, where the annual additions is expected to almost double from 2020.

Solar PV singularly, is expected to account for 60% of total renewable capacity additions in the world till 2025, while wind is expected to provide another 30%. Due to further cost weakening, offshore wind additions on an annual basis are also expected to rise considerably and is projected to account for one-fifth of the total wind energy market in 2025. Offshore growth is expected to come from US and China, apart from Europe.

The renewable energy market is growing rapidly, and the energy equation of the world is shifting at unprecedented speed. Leading nations of the world must frame apt guiding policies for integrating the of the variable renewables in the electricity systems securely and cost-effectively.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

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