A favourable climate for renewable energies

 

 

Renewables come through the COVID-19 crisis with laurels

In July, , an analysis by the think tank Ember announced that in the first semester of 2020, Europe had for the first time produced more electricity from renewable sources than from fossil fuels. This growth stems from favourable climatic conditions, the start-up of new installations and the retreat of coal. The retreat of fossil fuels has been confirmed by the latest report from the International Energy Agency, published in November. The fall in global demand for energy caused by the COVID 19 pandemic has had a greater impact on non-renewable sources. Thanks to privileged access to networks, long-term contracts and the continued commissioning of new plants, green electricity has continued its development, reaching expected growth of almost 7% for 2020. After a downturn in the first semester of 2020, due to problems of supplies of materials and labour, renewable energy projects underwent revigorated growth in the second half of the year. This demonstrates a stronger capacity of adaptation and resilience than expected. The IEA estimates that the sector will break new records of development in 2021, with growth reaching around 10 % – boosted in particular by India and the European Union, due to the delays accorded by government policies to support REN projects.

Still more encouraging, the agency forecasts the replacement of coal by renewables, making the latter the primary source of electricity by 2025

Lower costs and voluntary action: two dynamic levers

This strong development of renewables is partly driven by a fall in costs, itself caused by economies of scale, the improvement of technologies and fierce competition in this market. A report by the United Nations Programme for the Environment (UNPE), the Collaboration Centre of the Frankfurt School-UNPE and Bloomberg NEF (BNEF), published in June 2020, analysed global investment trends in renewable energies. The cost of electricity generated by new solar power plants has fallen by 83% in the last 10 years. In 2019, investment in renewable energies, excluding major hydropower projects, was three times higher than that in fossil fuels.

This trend has been confirmed by the financial markets. The price of shares in companies in the sector have risen steeply, with + 50% recorded for actors in the photovoltaic sector since December 2019.

Government support through incentive policies has also underpinned the development of renewable energies. Some countries have been exemplary in this direction, especially in South and Latin America where Paraguay, Uruguay and Costa Rica now obtain most of their electricity from renewable sources.

Uruguay has succeeded in carrying out a major transition, changing from one third of its production obtained from fossil fuels to, 20 years later, 36% of its production now coming from solar and wind energy, which together make up 97% of its production of renewable origin. This transition has been made possible by stable policies and incentives for investors.

On the other side of the Atlantic, Kenya has led the way in the development of renewable energies in Africa. Thanks to increasingly attractive prices in comparison to fossil fuels, strong potential and political backing, 93% of the country’s electricity is green and, in three years, the share of the population with access to electricity has risen from 63% to 75% today.

Governments should take advantage of this decisive shift

In the report issued by her institution, the Executive Director of the UNPE, Inger Andersen, encouraged governments to pursue and speed up their actions in this direction, in their economic plans for post-pandemic revitalisation.

“Renewable energies are one of the most intelligent and most profitable investments that countries can make in the framework of these plans.”

This period of emergence from the health crisis can indeed be considered as a unique opportunity to accelerate the development of renewable energies. The capacity of renewables has never been stronger. Green energy encompasses the potential to create new jobs, at the service of better global health, better air quality and a tolerable climate

This challenge has apparently captured the attention of the Spanish government which, in May, presented its plan to reach carbon neutrality from now to 2050, with plans to transfer energy production from coal to renewable energies with the closure of 69% of its coal-fired plants this year.

Nonetheless, the report shows that the commitments made by governments for 2030 fall below the targets of the Paris Agreement and even below what has been invested over the last 10 years.