Renewable energy, led by solar, could account for 80% of growth in electricity generation over the next decade.
A report released by the International Energy Agency (IEA) says that in most countries, generating electricity with solar energy is now cheaper than using coal or natural gas. Solar panels are now one of the cheapest sources of electricity ever, thanks to technological developments and policies that reduce investment costs. They can be installed in both households and businesses.
The IEA report lays out three scenarios for the global energy market, which is reeling from Covid-19. As the future of fossil fuels is threatened, the outlook for renewable energy is increasingly bright, led by solar energy.
In one IEA scenario, if the pandemic is contained and global energy demand returns to pre-pandemic levels by early 2023, the number of solar PV installations will surge, increasing capacity by 12% each year until 2030. Renewables will account for 80% of the growth in electricity generation during this period, surpassing coal by 2025 to become the main source of electricity.
According to the International Renewable Energy Agency (IREA), the cost of generating electricity from large-scale solar PV has fallen from 38 cents per kilowatt hour in 2010 to an average of 6.8 cents last year. “I see solar as the new king of the global electricity market,” said IEA Director Fatih Birol. “With current policies, deployments after 2022 will set new records every year.”
The IEA believes that solar will remain an affordable option, even as the pandemic drags on the global economy and causes energy demand growth to slow to its lowest level since the 1930s. “If governments and investors accelerate their support for clean energy, the growth of both wind and solar will be even more impressive,” Birol said.
Companies such as BP and Royal Dutch Shell have made major strategic changes to low-carbon energy sources, a sign that the pandemic is causing major changes to the global energy market.
The IEA also predicts that oil demand will stop growing over the next decade. Energy demand could fall by 5% this year and investment in energy could fall by 18%.
