'Solar to become king of electricity markets': IEA report

Solar energy is likely to become the leading solution to meet global growth in electricity demand, as governments around the world seek a recovery from the COVID-19 pandemic, the International Energy Agency said in its World Energy Outlook 2020 report released Oct. 13.

The IEA's flagship report considered several scenarios, and all of them foresee significant growth in solar power as the technology falls in cost, and increasingly competes with other energy sources.

"Renewables take starring roles in all our scenarios, with solar center stage," the IEA said in a statement.

Supportive policies and maturing technologies are enabling very cheap access to capital in leading markets. Solar PV is now consistently cheaper than new coal- or gas-fired power plants in most countries, and solar projects now offer some of the lowest cost electricity ever seen, the Paris-based agency said.

"I see solar becoming the new king of the world's electricity markets. Based on today's policy settings, it is on track to set new records for deployment every year after 2022," said IEA executive director Fatih Birol.

"If governments and investors step up their clean energy efforts in line with our Sustainable Development Scenario, the growth of both solar and wind would be even more spectacular – and hugely encouraging for overcoming the world's climate challenge," said Birol.

Grid investment needed

However, strong growth of renewables needs to be matched with robust investment in electricity grids, the IEA warned, as insufficient investment would cause grids to become a "weak link in the transformation of the power sector," with implications for the reliability and security of electricity supply.

Global energy-related CO2 emissions are set to fall by 7% in 2020 in the wake of the virus-induced slowdown, according to the IEA's analysis.

"Global emissions are set to bounce back more slowly than after the financial crisis of 2008-2009, but the world is still a long way from a sustainable recovery," the IEA said.

"A step-change in clean energy investment offers a way to boost economic growth, create jobs and reduce emissions," it said.

This approach has not yet featured prominently in plans proposed to date, except in the European Union, the UK, Canada, Korea, New Zealand, and a handful of other countries, the IEA said.

In the agency's Sustainable Development Scenario, the complete implementation of the IEA Sustainable Recovery Plan moves the global energy economy onto a different post-crisis path, it said.

"As well as a rapid growth of solar, wind and energy efficiency technologies, the next 10 years would see a major scaling up of hydrogen and carbon capture, utilization and storage, and new momentum behind nuclear power," it said.

Breaking the emissions trend

Despite a record drop in global emissions in 2020, the world is far from doing enough to put them into decisive decline, the IEA warned.

"The economic downturn has temporarily suppressed emissions, but low economic growth is not a low-emissions strategy – it is a strategy that would only serve to further impoverish the world's most vulnerable populations," said Birol.

"Only faster structural changes to the way we produce and consume energy can break the emissions trend for good. Governments have the capacity and the responsibility to take decisive actions to accelerate clean energy transitions and put the world on a path to reaching our climate goals, including net-zero emissions," he said.

A large part of those efforts would need to focus on reducing emissions from existing energy infrastructure, such as coal plants, steel mills and cement factories, the IEA said.

"Otherwise, international climate goals will be pushed out of reach, regardless of actions in other areas," it said.

Achieving a 40% reduction in global emissions by 2030 would require that low-emissions sources provide nearly 75% of global electricity generation in 2030, up from less than 40% in 2019, it said.

It would also require that more than 50% of passenger cars sold worldwide would have to be electric, up from just 2.5% in 2019, it said.

"Electrification, innovation, behaviour changes and massive efficiency gains would all play roles. No part of the energy economy could lag behind, as it is unclear that another would be able to move fast enough to make up the difference," the IEA said.