Global Concerns for Energy Security has Created Opportunity for Renewables
As the world continues to navigate new realities in the global energy market, several key countries have turned to renewables as a source of power and energy security. In their annual renewables report released in December of last year, the International Energy Agency (IEA) tells of the recent uptake of renewables and forecasts “unprecedented momentum” in their development in the next decade.
This years’ report is significantly revised from the previous year's analysis, forecasting much more rapid growth in nearly every subsector of renewable energy. For renewables as a whole, the IEA expects global power capacity of renewables to grow by approximately 2,400 gigawatts (GW) by 2027, a 30 percent increase in expected capacity compared to last year’s forecasts. From 2022-2027, renewables are expected to account for 90 percent of the world’s power capacity expansion.
This rise in renewables, according to the IEA, is driven by two key factors: energy security concerns stemming from current geopolitical realities, namely the war in Ukraine, which has caused disruption in the global fossil fuel market, and national policies designed to accelerate renewables’ development and use. In fact, the IEA expects renewables to be the only source of electricity to grow through 2027, eclipsing both coal and natural gas’ share of the energy mix in that time.
Solar photovoltaics (PV) and wind-generated power will outpace all other forms of renewable energy sources through 2027. Though renewables are poised to boom, the growth does not apply to all forms of renewable energy. The report notes that though variable renewables, like solar and wind power, will account for 80 percent of the expected growth in renewables to come from the pair. Variable renewables are sources in which the amount of energy generated is intermittent and thus unable to be “dispatched” to a traditional grid system. Dispatchable renewables, such as hydropower and geothermal power, have constant and controlled power that can be fed to the grid. Dispatchable systems are essential to the further deployment of variable renewables, filling generation gaps for variables and acting as a backup system.
The global growth is fueled by global conditions. Fallout from the war in Ukraine has drastically reshaped the European energy market, leaving many European countries starved for natural gas and other fossil fuels after Russia cut exports in response to sanctions. Existing plans for renewable energy development and deployment, like the EU’s REPowerEU plan, are now being accelerated as a response to the energy insecurity. Europe is joined by other world powers, like the United States, China, and India, who all have similar national policies promoting renewables.
In the United States, the Bipartisan Infrastructure Law and Inflation Reduction Act both contain massive funding packages for green energy development that will aid in renewables’ deployment. However, it is unlikely that the U.S. will be parting ways with the fossil fuel industry in some time, given the existing infrastructure, abundance of fossil fuels like natural gas, and the use of natural gas in green energy systems, such as blue hydrogen energy.