New wind and solar power capacity build will increase globally in 2021, but economic recovery, gas-to-coal switching and low fossil fuels prices will drive energy sector carbon dioxide emissions 1.4 gigatons (4.4%) higher year on year in 2021, S&P Global Platts Analytics said Dec. 11.
The global buildout of wind and solar power capacity will be driven by a host of grid-parity solar projects in China, a rebound in Indian installations, and deferred US installations from 2020 into 2021, the analysts said during a remotely held briefing with reporters to discuss the S&P Global Platts Analytics 2021 Energy Outlook.
"We have upgraded our global solar PV additions forecast for 2020 by some 7% or about 8 GW, while keeping 2021 capacity additions forecasts unchanged," the analysts said.
Coupled with a recovery in nuclear power generation, growth in renewable electricity supply will weigh on the recovery of fossil fuel demand in the power sector, according to the briefing.
The biggest impact of the US presidential election on energy markets could be a change of course on US environmental policy, but with control of the US Senate to be undecided until January, it is unclear how much ability the incoming Biden administration will have to change policy, the analysts said.
Several of the world's largest economies now have some form of net-zero emissions target and greater global ambition could emerge at the UN Climate Change Conference (COP26) in November 2021.
However, despite this greater focus on long-term carbon emissions reductions, the economic recovery, gas-to-coal switching and low fossil fuels prices will push global energy sector carbon dioxide emissions 1.4 gigatons or 4.4% higher year on year in 2021, according to Platts Analytics.
In the US, gas-to-coal switching and recovering power demand will increase the call on coal supply in 2021, "but financially distressed US coal producers will find it challenging to adequately ramp up supply," the analysts said.