Reports are key indicators of where modern trends are going. That’s especially true with developing industries like renewable energy. Report after report have only confirmed renewable energy is shaking up traditional energy markets.
The International Renewable Energy Association’s (IRENA) REthinking Energy: Accelerating the Global Energy Transformation confirms these trends. IRENA recently released their findings in energy and policy development.
According to the report, global solar photovoltaic (PV) capacity reached 219 gigawatts (GW) in 2015, more than five times the capacity in 2010 (40 GW). This trend is expected to continue with new global PV capacity in 2017 supposed to reach 79 GW, according to an IHS technology report. By 2030, solar PV capacity could account for 7% of total global power generation.
What’s been helpful for solar energies rise to the top has been sharp declines in prices. In many countries, solar prices have reached new lows, according to IRENA. Solar energy is now cheaper than fossil fuels in many nations. Solar PV prices have fallen by 80% since 2009, said IRENA.
Wind power is also strong. Currently according to the Global Wind Energy Council (GWEC), global capacity reached 432.33 GW in 2015, 63.48 GW more than from in 2014.
IRENA said wind turbines prices have fallen by one-third since 2009. Even without government support, onshore wind farms are cost competitive or less than gas-fired power plants, oil, or coal, according to IRENA.
Falling prices in both wind and solar have not only increased capacity but investment, as these two technologies captured a whopping 90% of 2015 global renewable energy investments.
While the wind and solar power’s growing energy prowess is necessary, battery storage units, which can store both these technologies when needed during non-peak periods will play a critical role going forward. By 2020, IRENA expects this growing market to reach USD $14 billion, up from USD $2.2 billion in 2015. Falling lithium-ion battery costs, along with Tesla’s Powerwall are giving glimpses of its potential. By 2030, IRENA projects battery storage for electricity could reach 250 GW, nearly 250 times more than currently.
Policy-wise, the move towards cleaner sources of energy is helping move nations in the right direction. Currently, 170 countries have created renewable energy targets, while 150 have a policy in place to boost renewable energy investments, IRENA said.
This strong support by countries overwhelmingly to transition to renewable energy has seen strong global investments this century. In 2004, this figure was USD $50 billion. In 2015, renewable energy investment reached a record USD $348 billion.
Emerging market countries including China and India have been serious players. China recently has said they are committed to spending USD $361 billion through 2020 on renewables. Meanwhile, accounting firm Ernst & Young’s 2016 report pointed to developing nations including Egypt, Mexico, and Chile are becoming hotspots for renewable energy investors compared to European markets.
However, countries, including China are promising to pick up the slack and pull away in the cleantech race.
IRENA’s analysis of the cleantech market proves renewable energy on the global level, will only become more competitive and transform energy markets.
To read IRENA’s full report, view here.