25 January 2021 - 17:15
The renewable and sustainable energy that resists the Coronavirus pandemic
The Covid-19 crisis is an opportunity to accelerate the development of new energy resources
The year 2020 will be remembered as the year of the Covid-19 pandemic and the great economic depression caused by the containment measures. However, it will also be remembered as the turning point for rethinking the global economy as well as renewable and sustainable energy sources, confirming that crises are also often fertile ground for planting the seeds of future revival. The theme of a new economic trend, with renewed attention to people and their relationship with the environment, has never been as central to the political and industrial debate as it has been in recent months, especially in Europe: many countries and major industrial companies have announced programmes to support environmental sustainability and a green economy. According to an International Energy Agency (IEA) report, 2020 will be a record year for the development of renewable and sustainable energy, a trend that could continue in years to come. During the first 10 months of 2020, China, India and the European Union increased their auctioned renewable and alternative energy capacity worldwide by 15 percent compared to the same period in 2019. Furthermore, listed companies in the renewable energy sector and project developers performed above expectations on major stock market indices, while in October 2020, the share value of solar companies doubled compared to December 2019.
According to the IEA, with adequate support, the global yearly contribution of photovoltaics could reach 150 gigawatts (Gw) by 2020, an increase of around 40 percent in three years. Electricity generated by renewable technologies will increase by 7 percent globally in 2020, supported by record new capacity and in the face of an annual decrease of five percent in global energy demand, the lowest since World War II. Staying within the renewable power generation sector, Europe has shown continued growth despite the Covid-19 pandemic. As highlighted by the report released at RE-Source 2020 – the annual meeting of major energy consuming companies and renewable resource suppliers that is held in November – the cumulative contracted volume of corporate renewable power purchase agreements (PPAs) in Europe has reached 11 Gw compared to just 2.2 Gw at the end of 2016.
The reason for this surprising result during such a critical time as the Covid-19 pandemic is rooted in the past. For decades now, renewable and alternative energy has been supported by favourable policies, especially in Europe where its use is incentivised and takes precedence over fossil fuels in terms of market regulation. The renewable and sustainable energy sector has undergone a process of continuous innovation in order to increase its competitiveness with fossil fuels. According to the International Renewable Energy Agency (IRENA), the cost of solar energy has fallen by 82 percent in the last 10 years. Moreover, investors now prefer to use renewable and sustainable energy for new power plants.
Moving away from the electricity sector, there are critical issues in some of the more mobility-related sectors, such as biofuels. According to the IEA, the use of biofuels will record its first annual decline in 20 years due to lower demand. The demand for bioenergy is also decreasing in industry because of the fall in economic activity. It is estimated that these declines, together with the growth of renewable energy, will result in an overall increase of 1 percent in global renewable and sustainable energy demand in 2020. However, the biofuel sector could undergo significant development in countries with the highest emission rates, such as India. Of particular interest regarding the development of biofuels in India is the 2.5 billion dollar funding from the Asia Clean Energy Fund (supported by Japan) under the Clean Energy Financing Partnership Facility and South Korea’s e-Asia and Knowledge Partnership Fund. Over coming years, the Asian Development Bank (ADB) will support the production of biofuels from non-edible sources such as agricultural residues, solid urban waste and edible oils to produce bioethanol, biogas and biodiesel for use in the transport sector and power generation.