Renewable energy is the fastest growing source of energy, accounting for around half of the increase in energy and is set to penetrate the global energy system more quickly than any fuel previously in history, according to BP Energy Outlook.
Energy Outlook considers the energy transition from three different perspectives, each of which helps to illuminate different aspects of the transition: the sectors in which energy is used; the regions in which it is consumed and produced, and the consumption and production of different fuels.
The report highlights how the transition to a lower-carbon energy system is opening up a wide range of business possibilities.
According to the report, there is a strong link between human progress and energy consumption. The United Nation’s Human Development Index (HDI) suggests that increases in energy consumption up to around 100 Gigajoules (GJ) per head are associated with substantial increases in human development and well-being, after which the relationship flattens out. Around 80% of the world’s population today lives in countries where the average energy consumption is less than 100 GJ per head.
Improving energy efficiency in countries which use disproportionate amounts of energy is likely to be the key to solving the dual challenge of providing more energy and less carbon.
Almost all of the growth in power demand stems from developing economies, led by China and India. The demand growth in the Organization for Economic Cooperation and Development (OECD) countries is much smaller, reflecting both slower economic growth and weaker responsiveness of power demand to economic growth in more mature, developed economies. The mix of fuels in global power generation shifts materially, with renewables gaining share at the expense of coal, nuclear, and hydro. The share of natural gas is broadly flat at around 20%.
The report points that in an evolving transition scenario, renewables account for around two-thirds of the increase in power generation, with their share in the global power sector increasing to around 30% by 2040. In contrast, the share of coal declines significantly, such that by 2040, it will be surpassed by renewables as the primary source of energy in the global power sector.
The growth in renewable energy will be dominated by the developing world, with China, India, and other parts of Asia accounting for almost half of the growth in global renewable power generation.
By the mid-2020s, India is expected to outshine China as the world’s largest growth market, accounting for over a quarter of the growth in global energy demand according to the report. However, China is expected to remain the largest market for energy, roughly double the size of India in 2040.
In the Indian context, the capacity addition for renewable energy projects fell from 15 GW in 2017 to 14 GW in 2018. Solar PV, which was a significant contributor to renewable energy capacity addition, is expected to lag this year because of the cancellation of numerous tenders, complexities concerning taxation and the general election. In April 2019, Mercom reported that since the beginning of 2018, various government agencies such as the Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA), the Grid Corporation of Odisha (GRIDCO), Gujarat Urja Vikas Nigam Limited, and others had canceled nearly 5 GW of solar auctions.
India is expected to install approximately 71 GW of solar by 2022 according to a recent report released by Mercom India Research.
Image credit: Renew Power
Saumy is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.