Falling Clean Power Costs Can Supply Opportunity to Boost Environment Activity in COVID-19 Healing Bundles

Jun 15, 2020 01:38 PM ET
  • As COVID-19 hits the fossil fuel industry, a new record shows that renewable energy is a lot more economical than ever before-- giving a possibility to prioritize tidy energy in economic healing bundles and bring the world closer to meeting the objectives of the Paris Agreement.

Worldwide Trends in Renewable Energy Investment 2020-- from the UN Environment Programme (UNEP), the Frankfurt School-UNEP Collaborating Centre and also BloombergNEF (BNEF), offered at www.fs-unep-centre.org-- examines 2019 financial investment patterns, and also clean power commitments made by countries as well as firms for the following decade.

It discovers dedications equivalent to 826 GW of brand-new non-hydro eco-friendly power capability, at a likely price of around USD 1 trillion, by 2030. (1GW resembles the capacity of an atomic power plant). Getting on track to limiting worldwide temperature level rise to under 2 levels Celsius-- the primary goal of the Paris Agreement-- would call for the enhancement of around 3,000 GW by 2030, the specific amount depending on the innovation mix selected. The planned investments likewise drop far listed below the USD 2.7 trillion devoted to renewables throughout the last years.

Nevertheless, the report shows that the cost of installing renewable resource has actually struck new lows, indicating future investments will certainly provide much more capacity. Renewable energy capacity, excluding huge hydro-electric dams of greater than 50 MW, grew by 184 gigawatts (GW) in 2019. This highest-ever yearly enhancement was 20 GW, or 12 percent, greater than the new ability appointed in 2018. Yet the buck financial investment in 2019 was just 1 per cent higher than the previous year, at USD 282.2 billion.

The all-in, or levelized, cost of power continues to succumb to wind and solar, thanks to innovation improvements, economies of range and fierce competitors in public auctions. Prices for power from new solar photovoltaic plants in the 2nd half of 2019 were 83 percent less than a decade earlier.

" The chorus of voices contacting federal governments to use their COVID-19 recuperation bundles to produce sustainable economic situations is growing," stated Inger Andersen, Executive Director of UNEP. "This research study reveals that renewable energy is one of the smartest, most economical financial investments they can make in these plans."

" If federal governments capitalize on the ever-falling price of renewables to place tidy energy at the heart of COVID-19 financial recovery, they can take a large step in the direction of a healthy natural world, which is the best insurance coverage versus international pandemics," Andersen said.

Renewable resource has actually been gnawing at fossil fuels' dominant share of electrical energy generation over the last years. Nearly 78 per cent of the internet new GW of creating capacity added worldwide in 2019 remained in wind, solar, biomass and waste, geothermal and little hydro. Investment in renewables, leaving out huge hydro, was more than three times that in new fossil fuel plants.

" Renewables such as wind and solar power already make up almost 80 per cent of freshly developed capacity for electrical power generation," said Svenja Schulze, Minister of the Environment, Nature Conservation and also Nuclear Safety, Germany. "Investors as well as markets are convinced of their dependability and competitiveness."

" The promotion of renewables can be a powerful engine for the recovery of the economic climate after the Coronavirus situation, developing brand-new and protected jobs," she included. "At the exact same time, renewables improve air top quality hence safeguarding public health. By advertising renewable resources within the framework of Coronavirus economic stimulation bundles, we have the possibility to purchase future prosperity, health and wellness and environment defense."

2019 marked numerous various other documents, the record finds:

  • The highest solar energy ability additions in one year, at 118 GW.
  • The greatest investment in offshore wind in one year, at USD 29.9 billion, up 19 percent year-on-year.
  • The biggest funding ever for a solar job, at USD 4.3 billion for Al Maktoum IV in the United Arab Emirates.
  • The highest quantity of renewable resource company power acquisition contracts, at 19.5 GW worldwide.
  • The greatest ability awarded in renewable resource public auctions, at 78.5 GW worldwide.
  • The greatest renewables investment ever in developing economies other than China and also India, at USD 59.5 billion.
  • An expanding investment, with a record 21 nations as well as areas investing more than USD 2 billion in renewables.

Nils Stieglitz, President of Frankfurt School of Finance & Management, claimed: "We see the energy transition is in full speed, with the greatest capacity of renewables financed ever before. Meanwhile, the fossil fuel sector has been struck hard by the COVID-19 crisis-- with demand for coal- and also gas-fired power down in several nations, and oil prices plunging.

" The climate as well as COVID-19 dilemmas-- despite their different natures-- are both interruptions that regulate attention from policy manufacturers and also managers alike. Both dilemmas demonstrate the requirement to raise environment ambition and change the world's energy supply towards renewables."

The 2019 financial investment brought the share of renewables, omitting large hydro, in worldwide generation to 13.4 per cent, up from 12.4 per cent in 2018 as well as 5.9 percent in 2009. This suggests that in 2019, sustainable nuclear power plant stopped the exhaust of an estimated 2.1 gigatonnes of carbon dioxide, a considerable conserving given worldwide power market exhausts of around 13.5 gigatonnes in 2019.

" Clean power finds itself at a crossroads in 2020," said Jon Moore, Chief Executive of BloombergNEF. "The last decade created massive progression, however main targets for 2030 are much except what is called for to attend to climate modification. When the present dilemma eases, governments will require to enhance their aspirations not simply on eco-friendly power, but likewise on the decarbonization of transportation, buildings and also industry."