The price of solar photovoltaic energy is at an all-time low, the lowest ever recorded. The sector is now capable of attracting large shares of investment and securing a leading role in the energy industry on a global scale. The reduction in the cost of renewable installations — solar, but also the equally established wind sector — will be crucial in driving the energy transition.

Solar photovoltaic energy in the time of Covid-19

This is revealed by the International Energy Agency, an international organisation whose remit includes, among other things, promoting the development of renewable energy sources. On 13 October last, it published the 2020 edition of the World energy outlook (Weo), an annual report containing some of the most detailed and in-depth analyses of the global energy system. In the Weo, the agency captures the effects of Covid-19 on solar photovoltaic energy production, which is set to increase by 43 per cent by 2040. This is the result of the "extraordinarily turbulent" impact of the pandemic on the stability of commodity prices and product demand, which has weighed negatively on the attractiveness of fossil fuels and positively on that of renewable sources. This is an upward revision compared to the forecast made in 2018, partly owing to the collapse in photovoltaic prices — in the order of 20–50 per cent compared to 2019 projections — and the financial support policies promoted in Europe, the United States, China and India.

More broadly, the global emergency will impact the energy market in the near term: "Global demand is set to fall by 5 per cent in 2020, while energy-related CO2 emissions will drop by 7 per cent and energy investment by 18 per cent," the IEA underlines.

Four scenarios: with current policies, Europe will not meet its targets

The report, as is customary, compares several scenarios to explore how the market might evolve: one that assumes current policies are maintained (Stated policies scenario), one that hypothesises a delayed recovery (Delayed recovery scenario), one centred on sustainable development (Sustainable development scenario) and one that envisages energy production with net zero emissions (Net zero emissions scenario).

Under the current policies scenario, in particular, the Agency forecasts that the European Union will fail to achieve its climate neutrality target set for 2050. "Unprecedented" efforts will be needed at a global level, and not only from actors in the energy sector, to prevent oil from remaining an indispensable source. Demand for fossil fuels, however, is set to decline, especially if more decisive action is taken to support the reduction of polluting emissions.

Notwithstanding the uncertainties surrounding the effects of the coronavirus — from the severity to the duration of the pandemic — in the scenario that assumes current policies are maintained, the IEA estimates that over the next two years there will be a sharp fall in energy demand on a global scale. This reduction could extend to 2025 should the pandemic emergency continue, and would affect above all demand for gas and oil.

Making a difference through everyday behaviour

This is the first time the IEA has also included the net zero emissions scenario, which envisages the achievement of the goal of limiting the rise in global temperature to 1.5 degrees Celsius by 2100 relative to pre-industrial levels, as set out in the Paris Agreement reached at Cop 21 in 2015. As well as the elimination of net carbon dioxide emissions by 2050. At the same time, it focuses on the weight of everyday behaviour in reducing CO2 emissions.

Working from home "three days a week" would play an "essential" role in achieving this goal: under the net zero emissions scenario, it would contribute to reducing global carbon dioxide emissions by 55 million tonnes in 2030. Equally fundamental would be giving up air travel, or more broadly abandoning private transport in favour of sustainable modes of travel, and avoiding the use of air conditioning and heating devices. Not to mention that adopting a meat-free diet, the Agency notes, would reduce levels of methane and nitrous oxide in the air.

ASviS ✓ @ASviSItalia

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Per @IEA la crescita della domanda di petrolio finirà nel prossimo decennio. L’attuale bassa crescita della domanda energetica non costituisce però una strategia a basse emissioni, ma un sistema per impoverire i più vulnerabili.

bit.ly/3o4f5B5

♥ 1 16 ott 2020 · Apri su X →

Demand for solar photovoltaic and renewable energy

The report's conclusion is in any case positive: demand for renewable energy will grow across all the scenarios considered. By 2025 it could become the primary source of supply, and by 2030 cover 80 per cent of global energy demand. Contrary to every forecast made to date. But decarbonisation will not be a given: it will be necessary to stimulate improvements to the grid, making it resilient and capable of meeting every type of demand. And it will be necessary to install storage systems paired with renewable sources.

In the hope that detailed studies such as the World energy outlook — a useful tool for raising awareness among and informing political representatives — will shape the next steps of the energy transition.