Despite falling costs for renewables, the volume of clean energy planned until 2030 is far less than what was built in the previous decade, research from Bloomberg New Energy Finance (BNEF), the UN Environment Programme (UNEP) and the Frankfurt School-UNEP Collaborating Centre shows.
Countries and corporations intend to install the equivalent to 826GW of new non-hydro renewable power capacity, at a likely cost of around $1trn by 2030, the report ‘Global Trends in Renewable Energy Investment 2020’ concludes.
That compares to 1.2TW added in the past decade, and is far short of what is needed for the Paris climate agreement.
The report analyses 2019 investment trends, and the clean energy commitments made by countries and corporations for the next decade.
“Clean energy finds itself at a crossroads in 2020,” said Jon Moore, chief executive of BNEF.
“The last decade produced huge progress, but official targets for 2030 are far short of what is required to address climate change.”
As renewables are more cost-effective than ever, they provide an opportunity to prioritise clean energy in economic recovery packages, the report finds. Nevertheless, the report forecasts that the total spend on new renewable sources will be well below the $2.7bn of green power investment seen during the past decade.
The cost of installing renewable energy has hit new lows for wind and solar, thanks to technology improvements, economies of scale and fierce competition in auctions - meaning future investments will deliver far more capacity. The report found that the cost of electricity from new solar PV plants in the second half of 2019 was 83% lower than a decade earlier.
“The chorus of voices calling on governments to use their Covid-19 recovery packages to create sustainable economies is growing,” said Inger Andersen, executive director of UNEP.
“If governments take advantage of the ever-falling price tag of renewables to put clean energy at the heart of Covid-19 economic recovery, they can take a big step towards a healthy natural world, which is the best insurance policy against global pandemics.”
Renewable energy capacity, excluding large hydro-electric dams of more than 50MW, grew by 184GW in 2019, while global investment in new clean energy capacity increased by 1% to $282.2bn.
Renewable energy has been eating away at fossil fuels’ dominant share of electricity generation over the last decade, the report shows.
Nearly 78% of the net new gigawatts of generating capacity added globally in 2019 was in wind, solar, biomass, waste, geothermal and small hydro. Investment in renewables, excluding large hydro, was more than three times that in new fossil fuel plants.
“Renewables such as wind and solar power already account for almost 80% of newly built capacity for electricity generation,” said Svenja Schulze, Germany’s minister of the environment, nature conservation and nuclear safety. “The promotion of renewables can be a powerful engine for the recovery of the economy after the coronavirus crisis, creating new and secure jobs.”
The report found that 2019 recorded the highest solar power capacity additions in any previous year, at 118GW, and the biggest investment in offshore wind in a single year at $29.9bn, up 19% year-on-year. It also found a broadening investment in renewables with a record 21 countries and territories investing more than $2bn.
“We see the energy transition is in full swing, with the highest capacity of renewables financed ever,” said Nils Stieglitz, president of Frankfurt School of Finance & Management, “Meanwhile, the fossil fuel sector has been hit hard by the Covid-19 crisis – with demand for coal and gas-fired electricity down in many countries, and oil prices slumping.”
A report earlier this month by financial think-tank Carbon Tracker said the energy transition could wipe $25trn off the value of the world’s oil and gas reserves disrupting the entire fossil-fuel system, with major ramifications for financial markets and geopolitics.
