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2023 Renewable Energy Outlook


Power | Mar, 2023

According to a report published by the International Energy Agency (IEA), around 33% of the electricity is expected to come from renewable energy sources by 2024. Also, the solar photovoltaic (PV) is predicted to account for almost 60% (697 gigawatts), followed by onshore wind (309 GW), hydropower (121 GW), offshore wind (43 GW), and bioenergy (41 GW). Growing concerns regarding climate change, rapid adoption of environmental, social, and governance policies, and increasing innovation to boost the renewable energy technologies are some of the factors boosting the transition towards clean energy.

Skyrocketing Demand for Renewable Energy Resources

Although renewables energy is already expanding quickly, the fluctuating prices of oil and natural gas, spurred by the rising energy security and growing geopolitical tensions, have kicked renewables into an extraordinary new phase of even faster growth. Governments and businesses are looking to reduce reliance on oil and gas to meet their energy needs and hence finding clean energy alternatives by boosting renewable power capacities in their countries. Moreover, streamlining and reducing permitting timelines, improving auction designs, and providing better incentive schemes for the implementation and promotion of renewable energies are supporting the growth of renewables.

Currently, utility-scale solar Photo Voltaic and onshore wind are the cheapest options for green electricity generation worldwide. By 2027, the cumulative solar PV capacity is expected to triple (to over 2350 Gigawatts), which would make solar PV’s installed power capacity largest in the world, surpassing hydropower, natural gas, and coal. , according to IEA. Distributed solar PV, which includes rooftop solar on homes and buildings, is also on track to register fast growth, which can help consumers save big on energy bills. The manufacturing cost gap for solar PV is set to get close with the current lowest-cost manufacturers in China, owing to the rising efforts by India and USA to manufacture and distribute PV at cheaper rates for accelerating decarbonization efforts. The Production Linked Incentive scheme introduced by the government of India aims towards promoting the development of PVs by incentivising manufacturers, which could further boost the domestic production and export of PVs. In United States, manufacturers of solar PVs are eligible for two federal tax credits, the Advanced Manufacturing Production Tax Credit (45X MPTC) and the Advanced Energy Project Investment Tax Credit (48C ITC), which support clean energy manufacturing. . By 2032, non-hydro renewables could account for nearly one-third of world’s total power generation, owing to the decarbonization efforts being ramped up to minimize the impact of climate change.

According to TechSci Research report on “Global Solar Photovoltaic Glass Market By Type (Anti-Reflective Coated, Tempered, Transparent Conductive Oxide Coated & Others), By Application (Utility, Residential & Non-Residential), By End User (Crystalline Silicon PV Modules Vs Thin Film PV Modules), Competition Forecast & Opportunities, 2017 – 2027”, the global solar photovoltaic glass market is expected to register a significant growth during the forecast period. The market growth can be attributed to the rising demand for generating reliable and clean energy as well as emerging demand for solar photovoltaic glass across industrial and commercial sectors.

Corporates Accelerate Initiative Towards Decarbonization

From raw material extraction and refining to technology development, companies are looking for ways to capture value in the clean energy transition. The most common procurement avenue for corporations is through power purchase agreements (PPAs), which allow them an avenue for reducing emissions without directly building clean power facilities. In 2022, 300 corporations in the United States contracted a record-high 20 GW renewable energy capacity to meet sustainability targets, compared to 15 GW in 2021, with technology sector the biggest buyer. Technology companies such as Amazon, Google, and Meta have the largest PPA capacities. Energy companies such as ExxonMobil and Shell purchased 6.7 GW of clean energy in 2022. Increasing availability of hybrid solar and storage projects are contributing to corporate purchases of renewable energy storage capacities.

By 2050, biofuels can provide up to 27% world transportation fuel, as per IEA predictions. The policies designed to reduce GHG emissions in developing and advanced economies are driving the demand for biofuels. Currently, United States, Canada, Brazil, Indonesia, and India account for 80% of the global expansion in biofuel applications. In 2022, the global investment in energy transition technologies reached a record high of USD1.3 trillion, with renewable energy accounting for USD495 billion.

Clean Energy to Become More Cheaper and Greener

Switching to a greener and cheaper future from now could save USD12 trillion in the coming decades. Renewable costs have been deteriorating for decades and have already become cheaper than fossil fuels in many countries. Accelerating the transition to net zero will make the clean energy cheaper faster. In 2021, around 163 GW of renewable energy costs was cheaper than what the cheapest coal-fired power plants offered in G20 countries, according to a report released by the International Renewable Energy Agency (IRENA). Renewable power frees economies from fluctuations in fossil fuel prices and imports, curbs energy costs, and thus increases market resilience.

In United States, 99% of coal plants are more expensive to run than the all-in cost of wind or solar resources. For 80% of coal plants, renewable energy generation costs are 30% lower than the marginal cost of continuing to operate the plant. New solar cells have proven to be more efficient in converting light to energy than standard modules. Many new materials such as “thin film” technologies like those using perovskite semiconductors printed from inks and hybrid cells have emerged that could supercharge efficiency, which could generate more energy at greater scale. Recently, Aeromine Technologies developed a novel bladeless wind energy technology, designed to capture, and amplify the building’s airflow using aerodynamics. The turbine can be easily installed on the edge of a building and produce 50% more energy for the same price as a rooftop solar system and generate electricity around the clock in any weather condition. 

Green Hydrogen Energy Could Unlock New Opportunities

Growing interest in green hydrogen ignited with the IRA’s enactment could make hydrogen price-competitive with high carbon “grey” hydrogen. The falling renewable energy prices coupled with the dwindling cost of electrolysers and increased efficiency could increase the commercial viability of green hydrogen production. The cost of electrolysers and electricity occupy the largest share of the production cost, but the development of efficient electrolysers is expected to give a boost to the green hydrogen production. There have been many developments in the green hydrogen production technologies, which could improve hydrogen storage, transport, and distribution. For instance, Australian startup Lavo has introduced a Hydrogen Battery System that use solar energy and water to produce electricity even during power outages under extreme conditions.

Countries with high solar and wind power endowments such as Chile, Uruguay, South Africa, Brazil, Saudi Arabia, Ukraine, Turkey, Viet Nam, Morocco, Saudi Arabia, India, Spain, Chile, Canada are likely to benefit from new industrialization paths leading towards green hydrogen. China has begun the construction of the world's biggest green hydrogen project, Ordos in Inner Mongolia that will use electrolysers to produce around 30,000 tonnes of green hydrogen every year. The electrolysers will be powered by 450 MW of wind power and 270 MW of solar power as the area boasts substantial renewable resources—like wind speeds of 9 meters per second and a solar irradiance of up to 1900 kWh/m2. Just like China, many other countries are ready to capitalize on its early lead in solar and wind power to accelerate their move towards green hydrogen and take a big chunk of the predicted multi-million dollar market. Saudi Arabia plans to become the largest producer of ammonia integrating solar and wind energy establishing a mega plant in the city of NEOM with an investment of USD5 billion. The plant is expected to produce 1.2 million tonnes of green ammonia, which can provide up to 600 tonnes per day of carbon-free hydrogen.

According to TechSci Research report on “United States Green Hydrogen Market - Industry Size, Share, Trends, Opportunity, and Forecast, 2018-2028, Segmented By Electrolyser Technology (PEM, and Alkaline), By Application (Power Generation, Transportation, Industry Feedstock, and Others), By Source (Solar, and Wind), By Region and Competition”, the United States green hydrogen energy is predicted to grow substantially during the forecast period. The market growth can be attributed to the rising demand for sustainable energy alternatives and increasing investments in green power projects by public and private stakeholders.

AI & Robotics to Accelerate Green Energy Transition

As the Inflation Reduction Act is paving way for an increase in solar installation velocity, the industry needs to deploy more resources to keep up. However, a sudden surge in demand for solar project has led to labor shortages and hence the industry needs to adapt revolutionary thinking and work differently. As per estimates, the solar power industry will need to reach 400,000 jobs by 2030 and more than double by 2035 to meet the set climate goals for decarbonization efforts. However, robotic technology can help the industry achieve solar deployment goals, making the solar construction more efficient and improving safety.

Recently, Sarcos Technology in collaboration with the Robotics Corporation completed the automation of its Outdoor Autonomous Manipulation of Photovoltaic Panels (O-AMPP). The company plans to commercially launch its robotic solar field construction solution by 2024. With funding support from the US Department of Energy Solar Technologies Office, harmonized robotic systems will be able to deliver, detect, lift, and place photovoltaic modules in the field. Leveraging robotic technology will also the solar industry players to reduce soft costs for projects and engage in multiple projects simultaneously with improved construction timelines and quantity.

Way Ahead

Advances in technology driven by digitalization and growing need to find sustainable alternatives could further lead to more investments in renewable energy solutions. Moreover, rising government initiatives across the globe for decarbonization will result into emergence of more renewable energy projects, which could boost contribute the significant reduction in carbon emissions and lead to a better and sustainable future.