Biofuels in transport to see first annual decline in two decades, says IEA


The IEA’s Renewables 2020 report, released Tuesday, notes that renewable power is growing robustly around the world this year, but renewables outside the electricity sector are suffering from the impacts of the Covid crisis.

Demand for bioenergy in industry is also falling as a result of the wider drop in economic activity. The net result of these declines and the growth of renewable power is an expected overall increase of 1% in global renewable energy demand in 2020.

Renewable fuels for transport and industry are an area in particular need of potential policy support, as the sector has been severely hit by the demand shock caused by the crisis. More can and should be done, to support deployment and innovation in bioenergy to supply sustainable fuels for those sectors,

…the IEA report stresses.

This decline is expected despite a wide increase of renewable power worldwide. Driven by China and the United States, new additions of renewable power capacity worldwide will increase to a record level of almost 200 gigawatts this year, the report forecasts, while even stronger growth is to come. India and the EU will be the driving forces behind a record expansion of global renewable capacity additions of nearly 10% next year – the fastest growth since 2015.

This is the result of the commissioning of delayed projects where construction and supply chains were disrupted by the pandemic, and growth in markets where the pre-Covid project pipeline was robust.

Renewable power is defying the difficulties caused by the pandemic, showing robust growth while other fuels struggle. The resilience and positive prospects of the sector are clearly reflected by continued strong appetite from investors – and the future looks even brighter with new capacity additions on course to set fresh records this year and next,

…said Dr Fatih Birol, the IEA Executive Director.

Over the first 10 months of 2020, China, India and the EU have driven auctioned renewable power capacity worldwide 15% higher than in the same period last year – a new record that shows expectations of strong demand for renewables over the medium and long term.

However, policy makers still need to take steps to support the strong momentum behind renewables. In the IEA report’s main forecast, the expiry of incentives in key markets and the resulting uncertainties lead to a small decline in renewables capacity additions in 2022.

But if countries address these policy uncertainties in time, the report estimates that global solar PV and wind additions could each increase by a further 25% in 2022.

Renewables are resilient to the Covid crisis but not to policy uncertainties. Governments can tackle these issues to help bring about a sustainable recovery and accelerate clean energy transitions. In the United States, for instance, if the proposed clean electricity policies of the next US administration are implemented, they could lead to a much more rapid deployment of solar PV and wind, contributing to a faster decarbonisation of the power sector,

…added Dr Birol.

The report’s outlook for the next five years sees cost reductions and sustained policy support continuing to drive strong growth in renewable power technologies. Total wind and solar PV capacity is on course to surpass natural gas in 2023 and coal in 2024. Driven by rapid cost declines, annual offshore wind additions are set to surge, accounting for one-fifth of the total wind market in 2025. The growing capacity will take the amount of renewable electricity produced globally to new heights.

In 2025, renewables are set to become the largest source of electricity generation worldwide, ending coal’s five decades as the top power provider. By that time, renewables are expected to supply one-third of the world’s electricity – and their total capacity will be twice the size of the entire power capacity of China today,

…said Dr Birol.

The report can be downloaded here.



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