COVID-19 pushes wind and solar PV to forefront of countries’ economic recovery packages, says GlobalData
The COVID-19 pandemic led to a fall in electricity demand following authorities’ preference of electricity generation over renewable sources. This meant that coal-based generation saw an impressive contraction in its share within the electricity mix. Data and analytics company GlobalData anticipates that the generation mix is unlikely to roll back to its pre-COVID-19 state as demand is likely to remain low for the foreseeable future.
Somik Das, Senior Power Analyst at GlobalData, comments: “The continuing shift to renewables has been hastily brought forward by the pandemic. Several countries have started incorporating pro-renewables policies in their COVID-19 recovery packages. Major EU countries such as Germany, France, Spain, Italy and Portugal showed their intent to use the COVID-19 crisis as a catalyst to shift to a greener and sustainable future. Germany, for example, has pushed a stiff solar target as the country plans to add 4.5GW every year to attain its target of installing 98GW by 2030 to recover and usher investments into its stagnant economy.”
Declining levelized cost of electricity (LCOE) and investments in the renewable sector are expected to spice up the sector’s growth further. According to GlobalData, wind and solar PV together constituted around 17% of global installations, while in a business-as-usual scenario the expected combined share of these technologies would have reached 30% by 2030. However, GlobalData now expects the combined share to improve further as renewables now find a prominent place in countries economic recovery packages.
Although many governments are supporting fossil fuels to boost recovery measures, with the restarting of economic activities, all nations should use this opportunity and retain renewable energy as the epicenter for economic recovery.
Das adds: “The shift to renewables had been on the horizon for some time and the pandemic has only escalated this shift. Through the development of smarter and more efficient grid infrastructure, variable renewable electricity may well be incorporated into the grid. Developing the sector will increase investments and create significant employment opportunities, which will help kick-start the economic recovery of many countries in the EU.”
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