China is leading the way in renewable energy growth
Renewables’ relentless march on grid power is just getting started and there will be no stopping it
Almost one year ago, I wrote that most of the growth in renewable energy will happen in China, Latin America, the Middle East, and parts of the world that still lack access to reliable electricity, like India and Africa.
We now have some evidence of just how stunning that growth will be. In 2014, according to government statistics, China added about 18.7 gigawatts (GW) of new wind capacity – more than twice as much as the next five nations combined, and about 42% of wind additions globally. The Asian nation is the world leader in grid-connected capacity, with 95.8 GW, or about 30% of the global total in 2013. (The US generates more power from wind than China does, but that may be a short-lived status. China plans to increase its wind capacity to a massive 200 GW by 2020.) China has likewise become a global powerhouse in solar power. Since 2009, it has increased its capacity by 6,000%, and has become the world’s top producer of solar photovoltaic (PV) equipment. It is now second only to Germany in solar power capacity. But it plans to triple its solar capacity by 2017 to cut its reliance on coal, which will make it the global solar leader by far.
Latin America posted a 370% increase in solar PV capacity in 2014, with 625 megawatts installed, according to
Greentech Media’s Latin American analyst Adam James. Installations in the region are expected to more than triple again in 2015 to 2.5 GW. But even that stunning growth pales in comparison with the 30 GW of PV in the project pipeline. Much of it isn’t even driven by incentives; five of the 51 utility-scale solar plants now operating are merchant plants, selling unsubsidised power into competitive marketplaces alongside other conventional generators. Over three-quarters of the Latin American installations are in Chile, but James sees Mexico’s installations growing at an 84% annual rate, to reach 3.3 GW by 2018. Solar seems poised at last to realise longstanding hopes for a renaissance in the Middle East as well. Dubai recently awarded a contract to build a $330 million, 200 MW solar generating plant to a group led by Saudi Arabia’s Acwa Power International. The deal made global headlines because it guaranteed unsubsidised solar power at just 5.85 cents per kilowatt-hour (kWh), a new world-record low. Acwa submitted alternative bids to build larger projects, including a 1 GW system that would sell power for just 5.4 cents/kWh. That price point suggests that big banks like Citigroup, UBS, and Deutsche Bank are right on the money for forecasting that unsubsidised solar will become the cheapest form of new power generation by 2020. In many developing nations, it’s already cheaper than conventional fossil-fuelled grid power. In the US, the cost of power from utility-scale PV nearly halved from 2010 to 2013, and should easily hit grid parity at $0.06/kWh before 2020. Where the grid doesn’t yet exist for many people – particularly Africa and India – a variety of pay-as-you-go solar providers, small off-grid system providers, and standalone solar-powered devices (like lanterns) are growing rapidly. Companies like SolarNow, OMC Power, and Off Grid Electric are finding that solar is a very attractive option, even to the world’s poorest, when their main alternative is buying expensive and health-damaging diesel fuel. A new initiative of the Obama administration called Beyond the Grid aims to leapfrog the transmission grid, and drive $1 billion in investment into off-grid and small-scale clean energy solutions in just five years, to bring Africans out of energy poverty.
All of this ferment and rapid change does not sit well with the plodding utility industry, of course. In the US, a full-scale, partisan, legislative war has been under way for several years as clean-energy advocates seek ever-higher renewable portfolio standards, while those wedded to the fossil-fuel incumbency seek to roll them back.
comments powered by Disqus.