Renewable energy has been the most resilient form of power generation during lockdown, however, urgent investment is needed to scale systems and technologies and digitalize power grids to help meet climate goals, DNV GL’s latest Energy Transition Outlook Power Supply and Use report reveals. During the COVID-19 pandemic, renewables demonstrated to be less volatile than fossil fuels, as electricity demand dropped. This resulted in higher renewables use – for example up to 70% renewables generation on some days in Germany and in the UK, more than 60 days with no electricity from coal.
DNV GL’s report forecasts that renewable energy will increasingly dominate electricity generation. Solar and wind installed capacity will more than double from 1,250 GW in 2019 to 2,690 GW in 2025, continuing to grow and generate 62% of electricity by 2050.
Growth in renewables is forecast in all global regions, with significant expansion in Greater China, Europe, the Indian Subcontinent and North America. Wind generation is largely onshore, but offshore wind’s contribution will continue to grow, reaching about 28% of total wind production by mid-century. New renewables capacity can be installed more quickly, becoming ever more attractive from an investment perspective, through technological improvements, economies of scale and lower cost of capital for proven power plants.
However, DNV GL warns it is still not enough to meet climate targets. This year’s Outlook reports that carbon emissions have peaked in 2019, yet they will not fall sufficiently by 2050 to reach the Paris Agreement goal of 2°C global warming, let alone 1.5°C. In fact, DNV GL estimates a rise in average global temperatures of 2.3°C above pre-industrial levels.