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The renewable energy industry will see a decline in growth this year but will recover and start growing again next year, the International Energy Agency has said in a new report.
This year would be the first in two decades when new solar and wind power capacity additions will see a dip, the IEA said, noting that so far, the industry has demonstrated strong resilience to the consequences of the pandemic.
Even so, many projects will be delayed, leading to 13 percent fewer solar and wind power capacity additions this year, compared with 2019. In 2021, however, total new renewable energy additions will recover to 2019 levels, not least because of two large-scale hydropower projects set to come online in 2021.
This means that solar and wind will see slower growth for new additions than previously expected by the authority, and by as much as 10 percent.
However, this should not be cause for worry as previous forecasts were invariably upbeat, leaning on continued government support for renewable energy. None of the forecasts could anticipate the coronavirus pandemic and the extent of its impact on the world.
“The resilience of renewable electricity to the impacts of the Covid-19 crisis is good news but cannot be taken for granted,” the head of IEA, Fatih Bitol, said.
“Countries are continuing to build new wind turbines and solar plants, but at a much slower pace. Even before the Covid-19 pandemic struck, the world needed to significantly accelerate the deployment of renewables to have a chance of meeting its energy and climate goals. Amid today’s extraordinary health and economic challenges, governments must not lose sight of the essential task of stepping up clean energy transitions to enable us to emerge from the crisis on a secure and sustainable path,” he added.
Meanwhile, another report has warned that solar and wind power companies face another challenge: declining revenues. This trend could compromise the long-term prospects of some projects, the authors noted.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.