Large-scale renewable energy driving global transition

CORONAVIRUS PANDEMIC – A CROSSROADS FOR OUR CLIMATE

The restrictions resulting from COVID-19 have involved major changes to our society and have impacted greenhouse gas emissions as well. Global carbon dioxide emissions in 2020 are expected to be up to 7 percent lower than in the previous year, according to studies from UNEP, the United Nations Environment Programme¹⁾. The UN’s report emphasises that the 1.5-degree target may be within reach if the recovery following the pandemic focuses on green solutions. According to the report, targeted support measures focusing on fossil-free activities, for example, could reduce greenhouse gas emissions by up to 25 percent by 2030. This could give a 66 percent chance of meeting the target, according to researchers’ calculations.

Despite the world’s uncertain economic situation as a consequence of the coronavirus pandemic, global renewable energy development was strong in 2020. The International Energy Agency, IEA, notes that the expansion of renewable sources increased by seven percent in 2020 and predicts even stronger development of 10 percent in 2021, primarily as a result of the expansion of wind power and solar power in India and the EU. In four years’ time, in 2025, the IEA is expecting renewable sources to have overtaken coal on a global level and represent one-third of electricity production.

ELECTRIFICATION INCREASING DEMAND FOR ELECTRICITY

A technology shift to rechargeable solutions for shipping, aircraft, heavy vehicles and cars is taking place in the transport sector. Energy-intensive operations such as data centres, steelworks and cement factories are focusing on renewable electricity to an increasing extent and accelerating the energy transition. Growing cities, with both people and companies establishing themselves in city regions, are making completely new demands of the need for electricity and smarter power grids. As new technology prices fall and society’s efforts to phase out fossil energy are intensified, electrification of various industries is progressing at an ever-increasing pace. Thus the demand for renewable electricity is expected to increase by 60 percent up to 2050, according to Bloomberg New Energy Finance (BNEF). Everything indicates we are in the middle of a shift in the energy landscape, where the expansion of renewable electricity, reinforced power grid capacity and more efficient energy storage are paving the way for the solutions of the future.

WIND AND SUN – THE DRIVING FORCE FOR THE RENEWABLE TRANSITION

Clean technologies are already established and will soon be the most common electricity generation sources. According to BNEF forecasts, two-thirds of total energy production will be emissions-free by 2050. 56 percent of this can be expected to be produced by solar and wind power, compared with the current level of 9 percent. This is driven primarily by the fact that wind and solar power are tested, eco-friendly technologies involving low production costs throughout much of the world.

COST OF TECHNOLOGY FALLING

In just a few years, onshore wind power has developed from a technology dependent on government subsidies to being largely subsidy-free. This trend is set to continue, largely due to the latest generation of onshore and offshore wind turbines with their higher towers, larger rotors and increased output capacity. The cost of newly installed solar power has fallen by almost 90 percent over the last decade, and the industry is predicting rapid growth for solar cells going forward. Solar and wind power will play a key role in the expansion of renewable electricity generation over the next few years, making it possible for many European countries to switch their energy systems in cost-effective ways.

LARGE OFFSHORE WIND POWER VOLUMES

Offshore wind power is expected to be a key element in the power supply of the future. The EU Commission states that 450 GW of new offshore wind power is needed in the EU to make it possible for the EU to achieve a climate-neutral position by 2050. Great Britain, Germany and Sweden have good possibilities to develop offshore wind power. One major advantage of this technology is the size of its scale. The average size of offshore wind turbines being installed at present is almost 8 MW, compared with the average size of onshore wind turbines – 3.1 MW. The size of offshore wind farms has doubled since 2010, from 300 MW to the current 600 MW²⁾, and an offshore wind farm can have as great a nameplate capacity as a nuclear power plant.

RECORD YEAR FOR RENEWABLE ENERGY INVESTMENTS

There is enormous interest in large-scale renewable energy among asset owners all over the world. 14,000 billion dollars have been divested from fossil fuel assets on a global level up to 2020, a sharp increase from 52 billion dollars in 2014³⁾. Divestments of fossil investments are being followed at an ever-increasing pace by significant investments in renewable energy. 2020 was a record year, with 303.5 billion dollars being invested in new renewable energy capacity by private and institutional asset owners. A further 139 billion dollars was invested in the market for electric cars and charging infrastructure, according to BNEF. The business community is taking the lead and driving change thanks to its ability to upscale solutions and create positive effects and long-term commercial success. Wind power is one of the solutions that the business community is already able to upscale with great commercial success.

MIX OF RENEWABLE SOLUTIONS

One energy type like wind power is not the sole solution, however. The solutions to the global energy challenge will involve a mix of different types of energy such as wind power, solar power, wave power, hydrogen power, biopower and geothermal power. For example, hydrogen can replace coal and coke in steel production and dramatically reduce carbon dioxide emissions (currently 7 per cent of global emissions), provided that it is produced sustainably using renewable energy. Greater energy efficiency, improved energy storage and a smart power grid guaranteeing optimised use of energy at any given time are all developments already taking place in the energy sector. This landscape of energy initiatives, technology and intelligence is creating business opportunities for companies all over the world.

Peas Industries has a key part to play in the energy transition through its group company OX2, a leading player in the large-scale wind power industry. Solar power and other technologies are just around the corner.

Sources

1) Emissions Gap Report, UNEP, the United Nations Environment Programme

2) WindEurope

3) Statista Business Data Platform