Renewables continue to grow at an impressive rate in the global power sector, but not as much in the cooling, heating and transport sectors, according to a new report by REN21. In the wake of the COVID-19 pandemic, the world must immediately switch to clean energy in these other sectors or to prevent the impending climate disaster, according to the report.
The Renewables 2020 Global Status Report (GSR) states that while the total final energy demand continues to rise, the share of renewables has barely increased in the past decade. According to the report, while renewable energy share in the power sector is a healthy 26%, it is as low as 10% in the heating and cooling sector and only 3% in the transport sector.
The rising demand for fossil fuels, however, continues to be a worry. In 2019, the report found that globally, the private sector signed power purchase agreements (PPAs) for a record growth of over 43% in new renewable power capacity from 2018 to 2019. But while some countries are phasing out coal, others continue to invest in new coal-fired power plants. Finance from private banks for fossil fuel projects has increased each year since 2015, totalling $2.7 trillion over the past three years, the report highlighted.
Fall in emissions due to COVID-19 lockdown just temporary relief
Experts pointed out that a huge economic decline due to COVID-19 is expected to reduce emissions by up to 8% in 2020, but to meet the Paris targets, the world would require to maintain the 8% fall over the next 10 years. Rana Adib of REN21 said, “Even if the lock-downs were to continue for a decade, the change would not be sufficient. At the current pace, with the current system and current market rules, it would take the world forever to come anywhere near a no-carbon system.” Some recovery packages directly promote natural gas, coal or oil, she said, adding that electric cars and hydrogen technologies are only green if powered by renewables.
Report shines light on India’s renewables growth story
The report said the renewable sector generated around 11 million jobs globally in 2018. In India, the report said the Distributed Renewables for Energy Access (DREA) companies, or mini-grid and off-grid market, have recently begun to expand and have directly employed 95,000 workers in 2017/18, which was equivalent to the traditional utility-scale power sector.
Meanwhile, informal employment from DREA during the same time was over almost double the formal workforce: 210,000 informal jobs in India. Women constituted 25% of the DREA workforce in India, the report said. The study revealed the youth account for 40% of all jobs in DREA. Globally, the highest estimate of productive uses of energy-related job production was in India, with an estimated total of 470,000 jobs produced, the report said.
Despite the COVID-19 pandemic, the share of electricity demand met by renewables reached historic highs in India. According to the report, India added 13 GW of solar PV and wind power capacity in 2019, and ranked third in the world. But it stood fourth in ranking with its total installed renewable power, including hydropower. India’s installed solar PV capacity increased by 30%, although annual installations were down that year, the report said. Wind power additions increased 8.5% over 2018, as per the report.
India’s electricity from hydropower surged 16%, the report revealed, and that in the past 10 years, India’s electricity access increased from 68% to 95%. But despite the global rank in renewables, India is one of the countries that funds the largest amounts of new coal capacity, alongside China, Japan, The Republic of Korea, France, and Germany.
In India, total new investment in renewable power and fuels fell 4% in 2019 to $11.2 billion, because of delays in project financing resulting from unpaid discom dues. The decline reflected a 48% drop in wind power investment (to $2.2 billion) and a 32% drop in biomass and waste-to-energy investment (to $0.3 billion). Investment in solar PV capacity increased 8% to $6.6 billion.
The report has revealed that the global venture capital and private equity investment (VC/PE) in renewable energy increased 22% in 2019, to $3 billion, which was less than a third of its 2008 peak. India was the biggest market for VC/PE spending in 2019 – up 169% to $1.4 billion – followed by the United States where VC/PE investment fell 8% to $797 million, the report said. India’s wind, hydropower and solar developer Greenko Energy Holdings was bought by Singapore’s Sovereign Wealth Fund (GIC) and the Abu Dhabi Investment Authority for $824 million, in the biggest VC/PE deal of the year.
India’s solar PV market, rooftop solar declined in 2019
India’s solar PV market witnessed a decline, which the report attributed to an economic slowdown, tariﬀ caps and higher costs associated with tender participation, lack of transmission infrastructure and of access to grid connections, among others. The rooftop solar market declined for the first time in 5 years, although nearly 24 GW of large-scale capacity was in the pipeline in 2019.
The report stated that the decline was largely because of the economic slowdown combined with liquidity issues, as well as challenges to net metering and lengthy approval processes in some states. An estimated 1.1 GW of distributed and off-grid capacity was installed during the year. Around 70% of the total capacity of rooftop market was dominated by large companies, government entities and universities.
India was one of the top five countries in new wind power capacity, cumulatively accounting for 70% of annual installations, as per the report. The Power Grid Corporation of India announced plans for $1.8 billion of new transmission projects in several states to support 25.4 GW of planned wind and solar power projects.
The sale of off-grid solar products however witnessed a decline in India. The sales volume in India fell nearly 31% due to policy uncertainties, the limited funding availability of microfinance institutions, and rising imports and sales of non-solar portable lanterns in the country, says the report.
India ranked third in the world in solar thermal heating and cooling
The global solar water heating market witnessed a slump in 2019, and grew only 2%, after 2 years of double-digit growth, the report said. India was the third-leading contributor for new installations of glazed and unglazed collectors around the world. Karnataka, Gujarat and Maharashtra accounted for nearly 90% of the country’s additions to the solar thermal systems in 2019. India was among top 5 markets for affiliated off-grid solar systems in 2019, the report said.
Mini-grids improved crop production by 50% in India, costs fell by 70%
Meanwhile, the use of mini-grids reduced irrigation costs by 70% and improved crop productivity 50% in India. In the off-grid market, the country’s average annual revenue of micro-enterprises increased around 13%. Over 150,000 solar pumps have been sold. Of the estimated 125 million people using biogas for cooking in 2018, 111 million were in China and 9 million in India, according to the report. India sold 1.6 billion cubic metres of biogas. However, demand for biogas for cooking decreased in China and India between 2014 and 2018.