As a planet, together we are trying to achieve “Net Zero”, the results of which should be self-explanatory. For example, due to renewable energy, electricity should approach zero, and there should be oversupplies of natural gas and coal.
However, it will be a well-trodden path from our present-day situation to achieving “Net Zero”. Such predictions may well come to fulfillment but today there appears to be somewhat of a dichotomy.
In 2013, globally the consumption of thermal coal peaked, yet today’s price is very close to the all-time high. We have seen in the last two months a doubling of the price to USD180 per tonne. However, experts suggest that by 2025, renewables will overtake coal as the biggest supplier or source of electricity.
LNG (Liquid Natural Gas) has also doubled in price in the last couple of months to an all-time high USD20 per mmbtu (Metric Million British Thermal Unit).
As a result, the cost of natural gas has also risen in Europe, which has caused electricity prices to move up from €50 per MWh to another all-time high of €150 per MWh (Megawatt hour).
These trends will continue to happen, so the world needs to move fast so renewable energy is at the forefront of demand whilst dependence on fossil fuels fades away.
The future is bright for renewable energy. Today global electricity supply is made up of 26% of renewable energy resources. This figure according to the IEA, (International Energy Agency), will reach 30% by 2024.
In gigawatt terms, the prediction is that solar capacity will grow by 1,200 GW (Gigawatt)by 2024, which interestingly is the total electricity capacity of the USA, and double that of Japan. Experts advise that solar energy will account for 60% of the predicted renewable growth. The reason being is that solar energy is easily accessible.
Solar installations in the United States are expected to double to four million by 2023 and experts suggest that China will have installed by far the largest residential solar capacity in the world. China is also predicted to have the largest growth in industrial and commercial solar energy capacity
Due to an increase in capacity, wind power is becoming one of the front-runners of renewable energy. Expectations suggest that onshore wind capacity will increase by 57% by 2024. This growth will be led by China and the United States with the European Union hoping to have doubled their capacity by 2030. Other countries such as Latin America and Eurasia are expected to remain level for the period up to 2024.
It is expected that the capacity for offshore wind power will triple by 2024, and will represent 10% of global wind power generation. Of this expansion, the European Union will represent 50% with the United States and China expected to significantly add to their capacity.
The major challenges faced by wind expansion are financing, social acceptance, and grid integration.
Capacity is set to increase by 9% up to 2024, leading the way will be India, China, and Brazil. There are three super large projects expected to make up 25% of worldwide growth. One of these projects is in Ethiopia which is the 6.2GW Grand Renaissance Project. The other two projects are both in China, The Wudongde and Baihetan projects, being 16 GW and 10 GW respectively.
Growth has been somewhat curtailed as both China and Brazil are suffering from rising investment costs. These can be attributed to increased costs in social and environmental circles and fewer economical sites.
By 2024, with Asia accounting for one-third of worldwide expansion, geothermal power is anticipated to increase by 28%. The Philippines and Indonesia are expected to be the two powerhouses, while in Africa, Kenya is expected to overtake Iceland’s geothermal capacity.
In the United States, geothermal power will, according to experts, account for 8.5% of total electricity in the commercial marketplace by 2050.
The world has reached a crucial stage in its attempts to reduce greenhouse gas emissions and reduce the dependency on fossil fuels. Both solar power and wind power have taken center stage in the fight to reduce air pollution and offer easier access to non-fossil fuel power.
All governments across the globe bear the responsibility of working with both fossil fuel and non-fossil fuel companies to make the above predictions come to fruition.
It is clear that there are huge opportunities for businesses to develop green power production and such capital projects will benefit from raising capital via the monetisation of demand bank guarantees.