Dubai — The renewable power sector has grown its share of the market globally during the coronavirus pandemic, while oil, natural gas and coal have all declined, the director general of the International Renewable Energy Agency said June 24.
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Even as oil prices slumped amid the pandemic, the share of renewables in production of electricity has grown in all parts of the world, Francesco La Camera said in a webinar co-sponsored by the Financial Times.
"We have heard voices saying the COVID-19 was going to destroy the direction of renewable energy and we have said from the beginning this was just going in another direction," he said.
"The past five months have taught us that renewables have been proven as the most resilient way to produce energy. So they are not only the cleanest but also the most resilient way to produce energy."
The increasing share of renewables in the power mix underscored the need for battery storage development, according to Bruno Brunetti, head of global power planning at S&P Global Platts Analytics, in New York.
"As more conventional generating capacity is retired, especially in the US and Europe, we believe more batteries will be needed to boost flexibility and supplement renewables for peaking capacity," Brunetti said.
Now may be the best time to introduce a carbon tax on energy consumption because of low oil prices, IRENA's Camera said on the webinar.
"The first thing to do is move fossil fuel subsidies away from our economic system," he said. "It could be a good moment if a country wishes to make a carbon tax because now with the oil price going down it could be socially the best moment."
A carbon border tax is a key part of the European Green Deal, targeting imports from countries with weaker carbon emission policies.
Details of the tax are to be proposed by 2021 at the earliest. The Atlantic Council recommended in May that the tax should only be levied on import categories where objective carbon emissions data is available.
Global LNG suppliers and piped gas importers with the least methane emissions may end up having a competitive advantage if the tax is levied fairly, it said.
Global renewables capacity -- solar and wind -- will increase by about 162 GW in 2020, about 6% lower than projected in February, Platts Analysts forecast. Capacity additions in 2021-25 were seen staying even with 2019 levels, or up by an average 168 GW each year, it estimated.
Grid-parity projects or projects exposed to wholesale power prices may be at risk, according to Brunetti. "The fluctuations in power prices in recent months show how much volatility merchant projects can face, which could deter further development," he said.
Solar and wind will account for about 9% of the global power generation mix in 2020, Brunetti said.
"We believe clearer and stronger policy support is necessary for renewables to expand enough to cap any rise in global temperatures by 2 C through 2050. It is interesting that the hydrogen strategy in Germany and across the EU is putting an emphasis on renewables power, although it is still not clear how this can translate into higher renewables newbuild."