Renewables in, fossil fuels out
Replacing fossil fuels with renewable energy is vital if we are to stop greenhouse gas emissions and undertake decarbonisation. This will require a massive expansion in the deployment of renewable power, while at the same time proactively moving away from fossil fuels.³⁰
The International Renewable Energy Agency (Irena) has stated that renewable energy will need to supply 57% of global power by 2030, up from approximately 27% in 2020, if we are to limit climate change to 1.5°C. That will require a fourfold increase in the speed of renewables growth and will require annual renewables investment to rise from $329bn at the end of 2018, to $737bn by 2030 in order to meet that climate target.³¹
Despite Covid-19, the International Energy Agency (IEA) has said in its latest ‘Renewables 2020’ report³² that record levels of renewable power will be added this year totalling almost 200 GW. This additional capacity has been led by wind, hydropower and PV.³³
That increase saw a corresponding decrease in fossil fuels, mostly from coal and gas. However, coal and gas still represent close to 60% of global electricity supply.³⁴
The IEA’s outlook for 2021 is encouraging. It predicts 2021 will again see record levels of renewable capacity additions of nearly 10%, the fastest growth since 2015. This growth will be driven primarily by the commissioning of delayed projects where construction and supply chains were disrupted due to Covid-19, and continued growth in some markets – such as the US and Latin America – where pre-Covid project pipelines were robust.³⁵
India is expected to be one of the largest contributors to the renewables upswing in 2021, with the country’s annual additions almost doubling from 2020. While The EU’s capacity additions are also forecast to jump in 2021, mainly due to previously auctioned utility-scale solar PV and wind projects in France and Germany coming online.³⁶
According to the energy and climate website Carbon Brief, global unabated coal use must fall by around 80% this decade if warming is to be limited to less than 1.5°C above pre-industrial temperatures.³⁷
Fig. 3 – Renewable capacity additions by country/region 2019-2021
Record levels of renewable power were added in 2020 totalling almost 200GW. The outlook for 2021 predicts another record year.
Source: International Energy Agency
However, the IEA also warned that policy makers need to take steps to support the strong momentum behind renewables. And this will be key to ensuring renewable expansion progresses at the pace needed.³⁸
The uncertainties from incentives ending in key markets including China, the US and India is predicted to result in a decline in renewable capacity additions in 2022. But, if these countries can address these policy uncertainties in time, the IEA estimates global PV and wind additions could each increase by a further 25% in 2022.³⁹
Renewable capacity continues to expand, and if policy uncertainty can be replaced with policies that provide market and investor confidence, that expansion could move forward at even greater pace. However, on the other side of the coin, we find a directly opposing and conflicting scenario with regards to support for fossil fuels.