2 April 2019: According to reports by the International Renewable Energy Agency (IRENA) and Bloomberg New Energy Finance (NEF), the global transition to clean electricity generation continued in 2018, driven by lower costs of renewable electricity generation and a sharp decrease in battery prices.
Renewables are growing rapidly, but still not fast enough
IRENA’s report titled, ‘Renewable Energy Statistics 2019,’ shows that in 2018 renewable energy accounted for almost two-thirds of new installations for electricity generation with global additions of 171 gigawatts (GW) in renewable capacity. Solar and wind energy accounted for 84 percent of this growth. Installations of non-renewable generation capacity (including nuclear) contributed 115 GW. While the growth rate of non-renewable capacity has shown no discernible trend since 2001, additions in renewable capacity have grown almost every year over the same time frame. IRENA reports that one-third of global power capacity is now based on renewable energy.
The report provides a detailed breakdown of electricity generation capacity for different types of renewable energy. Hydro power constitutes the largest installed base with 1,172 GW of capacity, but its share of total renewable generation capacity fell below 50% for the first time in 2018, driven by strong growth in solar and wind energy.
With regard to regional differences the statistics show that non-renewable capacity has decreased in Europe, North America and Oceania by 85 GW; however, these decreases were more than offset by increases in non-renewable capacity in Asia (725 GW) and the Middle East (100 GW). This growth also explains why global electricity-related emissions have increased in 2018, despite rapid expansion of renewable energy use.
Renewable energy deployment must continue to accelerate to meet the objectives of the Paris Agreement on climate change and achieve the SDGs
Outgoing IRENA Director General Adnan Amin commented that the numbers “reflect an ongoing shift towards renewable power of global energy transformation,” noting that renewable energy deployment must continue to accelerate to meet the objectives of the Paris Agreement on climate change and achieve the SDGs.
Rapid decline in cost of offshore wind power and battery prices to challenge coal and gas
The release of IRENA’s statistics coincided with the release of a report by Bloomberg NEF on the cost of renewable energies and battery storage. According to NEF’s blog entry about the report, the levelized cost of electricity (LCOE) of lithium-ion batteries decreased by 35% in 2018, while the LCOE of offshore wind energy has fallen by 24%. The article notes that both technologies were considered immature and expensive only a few years ago, but they are now becoming cost competitive with other sources of electricity.
The author highlights that lower battery prices enable the provision of “dispatchable” renewable energy by co-locating intermittent renewable energy generation, like wind and solar, with energy storage. The ability to react to short term changes in demand puts renewable energy in direct competition with traditional baseload electricity that has been delivered mostly by non-renewable sources, such as nuclear, coal and gas. This means that clean technologies are now “threatening the balancing role that gas-fired that gas-fired plant operators, in particular, have been hoping to play,” the article states.
LCOE measures the all-in expense of producing one MWh of electricity from a new project, including costs associated with development, construction and equipment, financing, feedstock, operation and maintenance of a new generation facility. [IRENA Press Release] [Publication: Renewable Capacity Statistics 2019] [Renewable Capacity Highlights 2019] [Bloomberg NEF Blog Post]