Solar Power Will Overtake Coal’s Global Leadership This Decade, Says IEA

RIO DE JANEIRO, BRAZIL – Renewable sources are about to overtake coal as the world’s favorite fuel for electricity generation this decade, the International Energy Agency (IEA) reported.

In most countries, solar photovoltaic structures are now cheaper than coal and natural gas power plants, researchers at the Paris-based agency found in the annual report on global energy trends.

The lower cost and government efforts to reduce climate-damaging emissions are expected to further reduce the share of coal and provide renewable sources with 80 percent of the market for new power generation by 2030, according to the IEA.

The findings signal a remarkable shift from fossil fuels in the world’s power supply at a time when authorities are seeking ways to contain the emission of greenhouse gases responsible for global warming.

Hydroelectric power plants will remain the largest source of renewable energy, but solar energy is rapidly catching up because the manufacturing and installation cost of panels has dropped sharply.

“I see solar energy ruling the world’s electricity markets,” said Fatih Birol, IEA executive director, in a statement released along with the report on Tuesday. “Based on current public policies, it is on its way to breaking new implementation records every year after 2022.”

The agency’s projections are based on the so-called Declared Policy Scenario, which assumes that Covid-19 will be gradually controlled next year and that the global economy will return to pre-pandemic levels. The scenario includes announced intentions and targets which, according to the agency, are underpinned by detailed measures to materialize.

Goodbye coal

Demand for natural gas is also expected to slowly decline in developed nations, particularly in Europe, while demand for coal will retreat worldwide. Some 275 gigawatts of coal-powered capacity, or 13 percent of the total in 2019, will be shut down by 2025, mostly in the US and the European Union. This move will more than offset the increase in demand for coal in developing economies in Asia.

The share of coal in global energy supply is expected to shrink from 37 percent in 2019 to 28 percent in 2030. By 2040, the fuel that was once the favorite of power distributors will hold a share of less than 20 percent for the first time since the industrial revolution, the IEA concluded. This decline could be even more pronounced if governments step up the pace of decarbonization.

These principles require large investments in power grids, which need to be modernized to accommodate supply from more diverse sources that work only when the sun shines or the wind blows.

Investments to modernize, expand, and digitize networks need to reach US$460 billion in 2030, two-thirds more than last year. This spending will help activate 2 million kilometers of new transmission lines and 14 million kilometers of distribution networks, or 80 percent more than was added over the past ten years, according to the agency.

Source: Exame

LatAm Markets: Live Signals → — real-time movers, turnover leaders and FX across Latin America.