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Renewable power generation capacity will increase by 7 percent this year despite a 5-percent forecast decline in global energy demand, the International Energy Agency said in its Renewables 2020 report.
The agency also said the use of biofuels in industrial activity and transportation will decline this year, but the increase in renewables use will be strong enough to offset it, with the net increase in renewable energy demand seen at 1 percent.
Unsurprisingly, investor appetite for exposure to renewable energy is also growing, the IEA noted in its report.
“From January to October 2020, auctioned renewable capacity was 15% higher than for the same period last year, a new record,” the IEA said. “At the same time, the shares of publicly listed renewable equipment manufacturers and project developers have been outperforming most major stock market indices and the overall energy sector.”
The authority added that by October 2020, the shares of solar power companies had doubled in value from the end of 2019 thanks to these trends and expectations among investors that we will see strong business growth over the next five years.
Net installed capacity for renewable power generation will this year grow by 4 percent, according to the IEA, with China and the United States accounting for the biggest jumps, at 30 percent for each of the two countries. The global total at the end of this year, then, is expected to reach 200 GW.
Next year, however, the scales of most additions will tip to Europe and India, the IEA noted. As a result, total renewable capacity additions next year could rise by a record-breaking 10 percent.
These developments paint the renewable energy sector as quite a lot more resilient to the pandemic than the fossil fuel industry. It is, of course, supported by governments striving for a net-zero future and throwing their weight behind wind and solar projects.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com