Wind and solar power to exceed coal and gas by 2024
It’s the news that anyone with an interest in renewables will be glad to hear. The days of oil, coal and gas dominating the world’s energy supplies could be numbered.
According to the International Energy Agency (IEA), capacity for wind and solar power is expanding so fast globally that both sources of power will exceed the capacity for two other energy juggernauts – gas and coal – by 2024.
In the IEA’s Renewables Report 2020, they expect wind and solar power to double over the next five years, allowing them to overtake gas by 2023, followed by coal in 2024. The likes of hydroelectric power and biofuel will add to the decade’s renewables surge, even under the IEA’s ‘less ambitious’ main case scenario.
Capacity for renewables is expected to jump by another 10 per cent in 2021 alone, led by developments in Europe and Asia. India is expected to be a particular renewables success story in 2021, as a number of solar and wind projects are expected to come online by next year, subject to delays during the ongoing pandemic.
Cheaper, faster, stronger
Renewables were singled out by the IEA as having weathered the COVID-19 storm effectively, according to the IEA. Despite challenges to supply chains and construction of key projects, renewable capacity was stronger during the first 10 months of 2020 than the IEA had expected in an initial report back in May.
That being said, policy certainty will be crucial in ensuring renewable capacity continues to rise during 2021-25.
Challenges to rising capacity include the expiry of onshore wind and solar PV subsidies in China in 2021, followed by the winding up of production tax credits for onshore wind in the US by 2022. As a result, the IEA noted that onshore wind would actually struggle somewhat, while offshore wind capacity would continue to boom.
As the IEA suggested, if policy uncertainties were mitigated by 2025, under a so-called ‘accelerated case’ scenario, global solar PV and wind capacity could grow by an additional 25 per cent in 2022, pushing renewable capacity as high as 271GW.
Peak oil could be upon us
The upsurge in renewable capacity couldn’t have come at a better time for the world – while global oil and gas production is continuing to rise, our consumption of it could be levelling off. As we lose enthusiasm for hydrocarbons, wind power, solar PV and biofuels serve as a useful tool to plug the energy capacity gap.
Multinational oil and gas producer BP published a 2020 report, detailing how we may have already passed ‘peak oil’ in terms of consumption, and it’s only going to drop further from here.
In order to make net zero carbon emissions by 2050 a reality, consumption and production of oil will have to fall from 100 mb/d (million barrels per day) at present to just over 20 mb/d by mid-century. By contrast, gas production and consumption would also have to fall from 4 trillion cubic metres to just over 2 trillion cubic metres by 2050, to guarantee a net-zero carbon future.
Rapid falls in oil and gas consumption by 2050 will only be possible, however, if countries invest significantly in wind and solar capacity, especially in the 2020s and 2030s. BP estimated that global investment in wind and solar would have to be $500-750 billion per year, in order to lower dependence on oil and gas, to bring about their ‘rapid’ and ‘net-zero’ scenarios.