According to theInternational Energy Agency (IEA), the market turbulence caused by the coronavirus will lead to a decline in the growth of the share of renewable energy in 2020. This is the first annual decline in two decades. Project delays, supply chain disruptions, and financing issues have contributed to slowing the pace of new renewable energy capacity additions. This 13% decrease in renewable energy capacity represents a loss of 167 gigawatts (GW).
Renewable energy growth could rebound quickly
A possible rebound in the growth of the share of renewable energy in 2021
The resilience of renewable electricity to the impacts of the Covid-19 crisis is good news. But it cannot be taken for granted. The Paris-based energy watchdog believes there could be a rebound to pre-crisis levels in 2021 as renewable energy projects pick up. But, it will require adequate political support from governments
The crucial role of politics in this rebound
Countries continue to build new wind turbines and solar plants, but at a much slower pace. Even before the Covid-19 pandemic hit, the world needed to dramatically accelerate the deployment of renewable energy. Governments were giving themselves the means to achieve energy and climate objectives.
In the face of today’s extraordinary health and economic challenges, governments must not lose sight of the goals. We will need to be able to accelerate the transitions to clean energy in order to emerge from the crisis on a safe and sustainable path.
Progress for RE before Covid-19
The crisis better managed by renewable energies than fossil fuels
Renewable energies are better equipped than their fossil fuel rivals to withstand the pressures of the Covid-19 crisis. But the magnitude and complexity of the economic and logistical challenges nevertheless took their toll. Clean energy made great strides in the years leading up to the pandemic. Indeed, wind and solar power in particular have made great strides to compete with carbon-intensive fuel sources, both in terms of price and capacity.
How to boost renewable energy at the end of the pandemic
However, the effects of the coronavirus have slowed this progress. The IEA warns that, despite the likely rebound in renewable energy growth, nothing is certain yet. The combined capacity growth for 2020 and 2021 will be 10% lower than the pre-crisis forecast. In addition, the growth in the share of renewable energy over the past two decades has been a great success.
But the continued decline in costs will not be enough to protect renewable energy indefinitely. A series of uncertainties that are exacerbated by the Covid-19 crisis can turn everything upside down. This underscores the critical importance of putting stimulus packages in place. Appropriate policy strategies must be put in place to ensure investor confidence.
According to the IEA, solar photovoltaic energy will be particularly affected by this decline. In fact, this sector will experience a much slower recovery. Households and small businesses will have to rethink their investment plans. Onshore wind power will be mainly affected by delays in commissioning. Many projects already funded and under construction will be delayed. This imbalance should be corrected in 2021.
The travel restrictions that have affected global oil markets have also had an impact on biofuels. The IEA forecasts a 13% drop in production this year due to the drying up of demand for transportation fuel.