Energy Transition in COVID-19 - Part 2
The outbreak of Coronavirus is certainly going to be the defining moment of our times. It is going to reset lot of things. In last 3 decades there has not been such an incident which changed the world on this scale. This takes us back to late 1980s or early 1990s when globalization was emerging, there was fall of Soviet Union, German unification and at the same period renewable industry had also started making its mark.
Since 1990, renewable energy sources have grown at an average annual rate of 2.0% which is slightly, higher than the growth of World TPES (Total primary energy supply), 1.7%. Growth has been especially high for solar PV and wind power, which grew at an annual rates of 37.0% and 23.4% respectively. Bio- gas had the third highest rate at 11.9%, followed by solar thermal 11.2% and liquid bio-fuel 9.7% (IEA (2019), Renewable Energy Information, 2019, IEA, Paris https://www.iea.org/reports/renewables-information-2019, 2019).
Source: (IEA, Average annual growth rates of world renewable supply, 1990 -2017, IEA, Paris https://www.iea.org/data-and-statistics/charts/average-annual-growth-rates-of-world-renewables-supply-1990-2017)
The trends in renewable energy have certainly been positive since 1990 except some during the financial crisis and immediate aftermath where investments in this sector had slowed down and flattened. But again this has also been sort of unique characteristic of renewable industry, its growth and fall has always been followed by some major event. Currently as the renewable installations had accelerated worldwide and the pandemic struck but now this gives an opportunity to carry on the accelerated path even if there might be slump in economic situation as pandemic recedes. The survival mode is on for several industries and now renewable sector need to steady itself first and shift gears as soon as possible.
Talking about the trends in renewable industry one of the best titles that I came across was from the article published in European Environment Agency website, "Renewable energy 2000 to 2010 - from toddler to teen". Further it explains that - The renewable energy sector has developed a lot the last ten years - a largely ignored toddler has become a willful teenager. Decisions that can help it mature further will depend on understanding what has nurtured its growth so far.
The renewable industry beautifully matured from 2010 and now has become a thinking and wise adult I would say, thus the wisdom of its industry players will definitely help it to maintain the momentum of its growth and perhaps after a decade it would grow into an old person like Oil & Gas and its prices would affect economy like Oil & Gas does now.
There has been huge transformation in the renewable investment in the decade of 2010 - 2019, which reached to around $2.6 trillion. Here too China has emerged as one of the big countries with largest investment of about $758 billion. The top 20 countries which had a significant investment in the renewable in the decade of 2010 to 2019 are shown in the following image.
Source: UN Environment, Frankfurt - School-UNEP, Bloomberg NEF
The 2020 has been a surprise, the targets and investment are certainly revised now but there will not be a significant dip in the investments of renewable energy. Renewable energy could power an economic recovery from COVID 19 by spurring GDP gains of almost $100 tn between now and 2050 according to the Guardian which quotes the report of IRENA.
In the next part different aspects of energy transitions will be discussed. For the scenario of renewable energy check out the first part here.