The International Energy Agency – IEA – has released a report saying that solar power is now officially the ‘king’ of cheap forms of electricity generation.
The announcement came following the publication of the IEA’s latest World Energy Outlook 2020 Report, which looks at the current energy mix, as well as offers forecasts for the future of energy consumption and generation.
Key among the report’s findings is that solar power is expected to pass coal-fired power generation as the world’s primary means of electricity generation as soon as 2025 after authors found it was the cheapest means of electricity generation around the globe.
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This was significantly higher than the IEA’s forecast in 2018, which expected solar’s share of the energy mix to be 43% less than it now anticipates by 2040. The agency says that it was forced to revise its forecasts after it found solar power deployment was anywhere between 20-50% cheaper than it originally believed.
The IEA says that “with sharp cost reductions over the past decade, solar PV is now consistently cheaper than new coal- or gas-fired power plants in most countries, and solar projects now offer some of the lowest cost electricity ever seen.”
Solar derived power is rated at around $30-60 per MWh in Europe and the United States, while priced at just $20-40 per MWh in China and India, where there are significant “revenue support mechanisms,” to guarantee competitive prices.
“Renewables meet 80% of the growth in global electricity demand to 2030,” the IEA says, adding that while “hydropower remains the largest renewable source of electricity, solar is the main driver of growth as it sets new records for deployment each year after 2022, following by onshore and offshore wind.”
This is in addition to the fact that renewable sources of power generation such as PV solar and wind power were the only of the major sources of energy to report any growth figures for the year. The IEA expects that solar PV and wind-power will account for more than one-third of the globe’s energy needs by the end of 2030, up from just 8% in 2019.
Another interesting headline in the report is that the COVID-19 pandemic led to an unprecedented 5% drop in energy demand, while carbon dioxide emissions were reduced by a reported 7%.
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Executive Director of the International Energy Agency, Dr Fatih Birol has said that “I see solar becoming the new king of the world’s electricity markets. Based on today’s policy settings, it is on track to set new records for deployment every year after 2022.”
“The era of global oil demand growth will come to an end in the next decade,” Dr Birol continued to explain, saying that “without a large shift in government policies, there is no sign of a rapid decline. Based on today’s policy settings, a global economic rebound would soon push oil demand back to pre-crisis levels.”
“Only faster structural changes to the way we produce and consume energy can break the emissions trend for good,” Birol said. “Governments have the capacity and responsibility to take decisive actions to accelerate clean energy transitions and put the world on a path to reaching our climate goals, including net-zero emissions.”
Authors of the report warned that unless governments around the globe implement net zero carbon emissions plans by the turn of the decade, we may not yet have seen the peak of oil and gas consumption. Without adequate policy responses, the IEA warns that demand for gas may rise by as much as 30% by 2040.
The IEA included in its latest report a roadmap to limiting global warming to 1.5C by the middle of the century, which suggests that if employees work remotely three days a week, this could play an “essential” role in hitting the “net-zero emissions by 2050 case.”