The Covid-19 crisis is hurting – but not halting – global growth in renewable power capacity. The number of new renewable power installations worldwide is set to fall this year as a result of the unprecedented Covid-19 crisis, marking the first annual decline in 20 years. In 2018, Asia-Pacific (APAC) accounted for the largest share of the global renewable energy market. In addition, the APAC renewable energy market is projected to exhibit a CAGR of 8.90% during the forecast period. In recent years, energy consumption has increased manifold in APAC. With traditional power resources failing to meet this rising energy requirement, the spotlight is shifting towards alternative energy resources. In APAC, the demand for energy is fuelled by rapid industrialization and urbanization. A burgeoning middle-class has led to the expansion of the consumer base in Asia. China and India are making massive investments in renewable energy, which is drawing tremendous commercial interest towards these countries.
- Even with continued cost reductions, renewables are not sheltered from future market uncertainty in terms of demand and availability of financing
- Renewable electricity is more resilient than fossil fuels but still affected by Covid-19 crisis
- The forecast for 2020-21 combined is revised down by almost 10%. Covid-19 exacerbates existing challenges facing renewable energy in China, Europe and India.
- Renewable energy consumption by residential and commercial customers increased 6 percent and 5 percent, respectively.
- Moving into 2020, companies in the renewable energy industry should be mindful of a few caveats that could impact renewable energy growth.
Key players are adopting numerous strategies such as product launch, acquisition, collaboration, partnership, and business expansion, to stay competitive in the market. For instance, Innergex acquired Alterra. In September 2018, Ørsted completed the acquisition of Deepwater Wind, US an off-shore wind energy development group. The acquisition involved a transaction of USD 510 million. GE Renewable Energy in collaboration with Juhl Energy, has recently initiated a solar-wind hybrid power generation project in the US. In 2018, NEE announced that it is set to acquire Trans Bay Cable, LLC for about USD 1 billion. Enel won the first ever renewable energy tender in India through its subsidiary BLP Energy Private Limited. The amount of funding provided for clean energy worldwide has steadily increased over the last decade. In 2004, clean energy investments totalled just over 45 billion U.S. dollars and increased to 279.8 billion U.S. dollars in 2017. The significant increase in investment funding indicates that the industry has matured greatly. Policy support for renewable sources, an accelerating industry, and the emergence of publicly listed companies that own renewable energy assets (also known as yieldcos) have driven the steady rise in clean energy investment.
- Enel is expected to invest $290 billion in the construction of the wind farm. li>New investment in clean energy worldwide 288.3bn USD li>Global investment in solar energy 141.1bn USD
- Europe's investment in renewables 62.2bn USD
- Global investment in small hydropower 0.9bn USD
- The United States alone accounts for a significant share of global clean energy investments
- Funding for clean energy initiatives totalled $64 Billion in the US
- Governments must play a key role by providing certainty, keeping long-term ambitions and improving investor confidence
Increased greenhouse gas emissions (GHGs), especially CO2 from the use of fossil fuels for energy generation triggered need of clean renewable energy. The dwindling existence of fossil fuel on Earth coupled with its high costs, are fuelling the renewable energy market. Limited presence of fossil fuel on the earth as well its volatile prices, fuels the renewable energy market. Huge capital required for the generation of energy from renewable sources. Continuous technological advancements and increasing government support in the renewable energy sector. Lucrative opportunities for renewable energy market growth. The size of the market for renewable energy is expected to grow in the developed and developing economies due to the implementation of strict government regulations regarding climate change.
- Net additions of renewable electricity capacity to decline by 13% compared with 2019
- The hydroelectric power segment is expected to dominate the market
- Beyond 2021, 70% of wind and PV projects are subject to market and policy uncertainty
- Biofuel production in 2020 falls by 13% as Covid-19 reduces transport activity, shrinking demand from mandate policies.
- Transport biofuel production is anticipated to contract by 13% in 2020, the first decrease in output in two decades.
- Low gasoline and diesel prices also challenge the business case for biofuels.
- Renewable electricity is more resilient than fossil fuels but still affected by Covid-19 crisis.