The Rise in Renewable Energy

Every year, there is a sharp increase in the demand of Renewable sources. According to BP Statistical Review of World Energy 2020, last year, renewable energy companies accounted for 41 percent of the rise in energy demand, the largest of any energy source. 

According to estimates from Reuters columnist John Kemp, oil was only 21 percent of the rise in total global energy demand  and natural gas represented 36 percent of the increase in energy demand,. 

Primary energy growth in 2019 was driven by renewables, followed by natural gas, according to BP. These together contributed to over three-quarters of the net increase.

BP said in its statistical review published earlier this year:

“The share of both renewables and natural gas in primary energy increased to record highs. Meanwhile, coal consumption declined, with its share in the energy mix falling to its lowest level since 2003”.

Although, renewables and EVs will encroach on the territory, Natural gas, coal, and oil will continue to be major sources of energy in the coming years. The growth in renewables will be accelerated by declining costs and policies around the world to encourage a shift ‎to lower-carbon energy sources, BP said. 

Going forward, cost competitiveness will be key to how much oil, gas, and coal that renewables can displace. Renewable power is increasingly cheaper than any new electricity capacity based on fossil fuels, the International Renewable Energy Agency (IRENA) said in June. 

The trend in renewables dominating power capacity additions has already started. With a record 118 gigawatts (GW), photovoltaics (PV) accounted for 45 percent of new-build capacity and was the most popular technology deployed in a third of nations, BNEF said.

According to estimates from research company BloombergNEF (BNEF), solar and wind power combined accounted for 67 percent of all new power capacity the world added last year, while the share of fossil fuels in new capacity declined to 25 percent. 

As per BP’s Energy Outlook 2020 published, renewables – led by solar and wind – will be the fastest-growing energy sources over the next three decades, with renewable energy use in the power sector growing quickly in all three scenarios that BP has examined—Rapid, Net Zero, and Business As Usual (BAU).

The use of coal in developed economies is sliding because older coal-fired plants cannot compete economically with new natural gas and renewable capacity, Ethan Zindler, head of Americas at BNEF, says. Including hydropower, renewables accounted for three-quarters of all commissioned capacity globally last year. 

In fuel demand for road transportation, the higher the penetration of EVs in major automotive markets, the more oil (gasoline) demand could be displaced. China is also looking to boost EV use and has extended subsidies for EVs through the end of 2022, Ram Chandrasekaran, Principal Analyst – Transportation & Mobility at Wood Mackenzie, said last month. 

EV sales are set to benefit from the ‘green recovery’ plans of many governments, especially in Europe.

WoodMac expects total global EV fleet to jump to 323 million over the next 20 years—that’s 35 times the current level, as this year’s recession “has left a dent in the electric vehicle (EV) sector but it’s a scratch on the paintwork, not a big repair job.”