The global power sector has witnessed a shift in capacity additions from conventional power sources to renewables. With a focus on decarbonizing electricity supply, the focus that governments and utilities have made on increasing the share of renewables in the overall energy mix has led to the establishment of support measures that offer a level playing field against conventional sources. Therefore, it is expected that renewable energy adoption will continue its upward trend.
GlobalData’s latest report, ‘Thematic Research: Renewable Energy’, highlights that the changing geopolitical situation in the oil and gas supply markets in the Middle East is expected to lead to demand for renewable energy across the globe.
Over the past decade, the growth of renewable power has gained momentum in many countries. With the current Middle East situation, industry maturing and costs falling significantly to make renewable power economically viable with little or no subsidies, GlobalData expects renewable energy adoption to continue its upward trend and for more countries to implement large-scale renewable power installations in 2020.
Hydropower, biomass, and biogas were the dominant renewable technologies 15 years ago, however, wind and solar have since dominated and will remain the leading renewable power sources in the foreseeable future. Except for small hydropower which occupied a share of 2% in the global power mix in 2019, the growth of all other renewable technologies is expected to be significant. Wind and solar are likely to make the largest contribution to the total installed renewable energy capacity at a CAGR of 7.2% and 9.8% respectively during the period 2020-2030. By 2030, solar PV will overtake wind to be the dominant renewable source and contribute to 34.5% of the total renewable power capacity.
In the past, renewable electricity has been expensive compared to conventional electricity, making it dependent on incentives and subsidies. Following technological advances, wind and solar are becoming economically competitive.
Onshore wind technology has evolved into an established and mature technology with a low cost of generation. Renewable projects are now starting to compete with conventional power, proving they can in fact replace conventional power in many countries. The US, China and the countries of Europe are expected to largely increase their renewable generation in the coming years.