The International Energy Agency (IEA) has declared solar the “new king” of electricity, arguing that, while renewables technologies as a whole are poised for rapid growth over the coming several decades, solar will be “at the centre of this new constellation of electricity generation technologies”.
The agency’s ‘World Energy Outlook 2020’ notes that, with sharp cost reductions over the past decade, solar photovoltaic (PV) is now consistently cheaper than new coal- or gas-fired power plants in most countries, while solar PV projects now offer some of the lowest cost electricity ever seen.
The report notes that the lowest price announced for solar PV in a competitive auction so far is $13/MWh, achieved in Portugal in August 2020.
Under the agency’s Stated Policies Scenario (STEPS), which many observers regard as overly conservative, renewables meet 80% of the growth in global electricity demand to 2030.
Hydropower remains the largest renewable source of electricity, but solar PV is the main driver of growth as it sets new records for deployment each year from 2022, followed by onshore and offshore wind.
The IEA notes that global solar PV capacity has already increased almost 20-fold over the last decade and is set to triple over the coming decade in the STEPS.
The report cautions, however, that the pace of change in the electricity sector, including electricity playing a larger role in the overall energy sector, such as through electric vehicles, will place an additional premium on robust grids and other sources of flexibility, such as storage.
Reliable supplies of critical minerals and metals are also vital to secure transformation.
“The upward march of electricity, and the integration of new wind and solar generation, depends on adequate investment in all parts of the system, including electricity networks. These are the backbone of today’s power systems, and they become even more important to the provision of reliable and secure supply in rapid energy transitions,” the IEA states, warning that there is a risk of electricity networks emerging as the weak link in the chain.
The IEA says an additional two-million kilometres of transmission and 14-million kilometres of distribution lines will be added over the next decade in the STEPS, 80% more than was added in the last ten years. As networks are modernised, expanded and digitalised, projected grid investment reaches $460-billion in 2030, up two‐thirds from the level in 2019.
Should governments and investors step up their clean-energy efforts in line with the IEA’s ‘Sustainable Development Scenario (SDS)’, which is aligned to the Paris Climate Agreement, executive director Fatih Birol says growth of both solar and wind would be even more “spectacular – and hugely encouraging for overcoming the world’s climate challenge”.
By contrast, coal is not expected to ever recover to the contribution levels achieved ahead of the Covid-19 pandemic, which resulted in sharp falls in the demand for coal and oil. Under STEPS, the mineral’s share in global energy demand dips, by 2040, to below 20% for the first time since the Industrial Revolution.
An even greater acceleration of renewables and reversals in coal and oil are required to meet the IEA’s new ‘Net Zero Emissions by 2050 (NZE2050)’ scenario, which extends the SDS analysis to target net-zero emissions by 2050 rather than 2070.
The outlook for natural gas, meanwhile, varies across regions and scenarios, with natural gas faring better than other fossil fuels in STEPS, where demand rises 30% by 2040, with growth in South and East Asia offsetting a slight decline.
Under the other scenarios, the gas industry would have to retool for a different energy future, by showing demonstrable progress with methane abatement, through alternative gases such as biomethane and low-carbon hydrogen, and/or technologies such as carbon capture, utilisation and storage (CCUS).
The report concludes that reaching net zero globally by 2050, as in the NZE2050, would demand a set of dramatic additional actions over the next ten years.
Bringing about a 40% reduction in emissions by 2030 requires, for example, that low-emissions sources provide nearly 75% of global electricity generation in 2030 (up from less than 40% in 2019), and that more than 50% of passenger cars sold worldwide in 2030 are electric (from 2.5% in 2019).
“Getting to net zero will require unwavering efforts from all,” Birol avers.
“Electrification, massive efficiency gains and behavioural changes all play roles, as does accelerated innovation across a wide range of technologies from hydrogen electrolysers to small modular nuclear reactors. No part of the energy economy can lag behind, as it is unlikely that any other part would be able to move at an even faster rate to make up the difference.”