Solar power is heading into a golden age thanks to an unlikely culmination of forces. A new axis of energy has emerged with the United States, the European Union, and China leading the charge toward a global energy transition to renewable energies and especially solar power. The United States has certainly not been a poster child for green energy in the last few years or, indeed, most of the nation’s history. Under the Trump administration, the country pulled out of the Paris climate accord and dragged its feet to put together a green stimulus package even as the rest of the world started to seriously edge into renewable energy markets, threatening to leave the U.S. behind. Under the new administration, led by incumbent president Joe Biden, the prognosis for U.S. renewables has improved drastically.
The U.S. will more than likely be falling in line with the ambitious decarbonization plans put forward by the European Union and even cooperating on a green energy trade agenda. While the United States and Europe together account for a massive chunk of global energy consumption and greenhouse gas emissions, their decarbonization can only go so far without likeminded policy from the energy-guzzling giant that is China. And China is, in fact, saying it will now pull its weight in the fight against catastrophic climate change, with lofty targets of peak emissions by 2030 and carbon neutrality by 2060. As for the rest of the global economy: when the Earth’s largest economies lean this heavily into a trend, the rest of the world tends to follow.
Kangping Chen, chief executive of Chinese PV manufacturer Jinkosolar, has made bold claims about the new golden age of solar including “big predictions in a bullish third-quarter stock market update” according to reporting by PV Magazine. Chen stated: “We strongly believe that the PV industry has ushered in a golden age, together with strong support from government policies to adopt renewable energy, promote grid transformation and green investments.” He went on to cite specific projections that promise big developments for solar in the very near future. “In the U.S., solar demand is expected to more than double over the next five years under the Biden administration. In Europe, the EU has officially announced plans to increase the GHG [greenhouse gas] reduction target from 40% to at least 60% below 1990 levels by 2030. In China, we are expecting the next, 14th five-year energy plan to focus on non-fossil [fuel] energy sources, with higher proportions of renewable energy, construction plans for large scale energy storage and grid transformation, and the introduction of supporting policies.”
While promises of a solar boom from someone who’s trying to encourage investors to support their solar company should be taken with a grain of salt, Chen’s assertions are backed up by a whole lot of research and solid data. Peak oil is upon us, and even the most veteran oil companies are scrambling to diversify. From China to the EU to the U.S., the next generation of energy giants are no longer supermajor oil and gas companies - they are solar and wind companies.
This is not to say that we should expect any collaboration or cooperation between the U.S. and China when it comes to green energy. In fact, it’s far more likely that Beijing and Washington are headed for an all-out energy trade war. But, historically, a healthy dose of competition bodes quite well for the economy as a whole, and indeed the solar sector stands to benefit enormously from a race to the top of the green energy food chain.
By Haley Zaremba for Oilprice.com
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