IEA forecasts surge in solar power with fossil fuels' decline set to continue
According to the International Energy Agency (IEA), solar projects now “offer some of the lowest cost electricity ever seen”. This is one of the conclusions from World Energy Outlook 2020, the IEA’s flagship publication released on October 13th. The report goes on to say that renewables will meet 80% of the global electricity demand growth over the next 10 years.
In yet another nail in the coffin of fossil fuels, the report predicts that demand for coal will not return to pre-Covid levels and its anticipated share of the 2040 global energy mix will drop below 20% by 2040. This will signify the lowest level since the Industrial Revolution.
The impact of the Covid-19 pandemic is seen in the report’s forecast that global energy demand will drop by 5% in 2020 with a consequent reduction of 7% in energy-related carbon dioxide (CO2) emissions. Solar power prices have dropped strikingly and are now between 20% and 50% cheaper than the World Energy Outlook predicted in 2018.
A note of caution is sounded by the IEA that although the drop in CO2 emissions is to be welcomed, it is unclear whether the catalyst – Covid-19 – will hinder or accelerate the net-zero energy transition in the forthcoming years. The pandemic will ultimately result in an 18% reduction in investment in clean energy in 2020.
Because of the uncertain future, the report calls on governments everywhere to improve upon their commitment to delivering a green recovery. The level of uncertainty is also reflected in the reduction in projected energy demand: pre-Covid, demand was expected to increase by 12% by 2030, a figure which has been revised down to 9%.
Normally an assertive statement on the direction the world is heading in, the 2020 World Energy Outlook is notable for qualifying many items of hopeful news with a reference to how a continuation of the pandemic may scupper these positives.
Lest there be any doubt about how we can emerge into a better world post-Covid, the report concludes by saying “governments have unique capacities to act and guide the actions of others…our secure and sustainable energy future is a choice – for consumers, investors and industries, but most of all, for governments.