Renewable energy projects made up three-quarters of all new electricity generation capacity projects in the world last year, the International Renewable Energy Agency said in a new report. In an even better news, IRENA said additions to renewable capacity increased by 7.6% last year and outperformed additions to fossil fuel power by a factor of 2 , 6.
2019 looks like a good year for renewable energy, with solar and wind power accounting for up to 90% of the total. And yet, the 176 GW added during this year was lower than the 179 GW added in 2018 in new capacity, which suggests a slowdown in new solar and wind additions, which may or may not be surprising given a change in the Chinese subsidy scheme for new renewable energy. profitability projects and considerations.
“Although the trajectory is positive, more needs to be done to put global energy on the path to sustainable development and climate mitigation – both of which offer significant economic benefits,” said the chief executive. IRENA, Francesco La Camera. “In these difficult times, we remember the importance of building the resilience of our economies. In what must be the decade of action, enabling policies are needed to increase investment and accelerate the adoption of renewable energy. “
However, this increase in investment could prove difficult given the current global economic situation. As is always the case, low oil prices negatively affect renewable investments. This time, however, the situation has become even more complicated by the coronavirus pandemic, which is already hurting supply chains, including in the renewable energy sector.
Premium: What will $ 15 of oil mean for producers?
Several large-scale renewable energy projects have already timed out last year, La Camera said. This year, things are likely to get even more complicated, not because of low oil prices or more relevant gas prices.
“Oil plays a negligible role in power generation and therefore does not compete with renewable energy in this regard,” said La Camera. said last month after world oil benchmarks plunged. “Renewables have become the dominant source of new electricity generation capacity over the past six years, as they are competitive at the bottom of the cost of conventional fossil fuel production – mainly with coal.”
However, gas is also cheap, and some governments are cutting subsidies for new renewable capacity to see if they can stand up without strong government support. China is the best example. After surprising markets with lower subsidies for new solar and wind power plants, Beijing this year ad even more discounts. The country will cut subsidies for new solar farms by 50% and completely suspend state support for offshore wind power.
Meanwhile in europe the netherlands are double subsidies for renewable energy to reduce emissions by 25% from 1990 levels by the end of the year. While the Netherlands may have 4 billion euros available just for that, other European governments are too busy finding a way to support the member states hardest hit by the coronavirus. This support, according to Brussels sources who spoke to CNBC, could be worth some 260 billion dollars (240 billion euros).
Of course, the EU’s renewable energy budget is a separate thing. However, while economies are on the verge of collapse, it will take some time before the renewable energy industry recovers to take advantage of this budget.
A group of states in the United States have launched a new initiative called “100% Clean Energy Collaborative”. The goal of the action is to achieve much more ambitious emission targets than are predicted by federal policies. The initiative will seek to help individual states in this group achieve their goals. Its success will remain to be seen after the disappearance of the pandemic. Chances are there are renewable projects that will be delayed or abandoned while the industry struggles with the effects of the unprecedented global response to the virus. All industries have been affected. None are immune. The transition from the world to a cleaner future may have been delayed for some time.
By Irina Slav for Oilprice.com
More readings from Oilprice.com: