A significant amount of growth has been observed in the renewable energy industry in recent years. Due to the proper support and strong push from the government in terms of policies and technological advancement, the industry can achieve its set target.
In 2020, according to the International Energy Agency (IEA), the global renewable power capacity reached its potential of near about 2,300 GW excluding large hydro plants but with solar and wind plants.
Around 26% of the electricity has been generated by different renewable energy sources across the world in 2020. The percentage is expected to increase as per the forecast report by IEA. By 2030, it is expected to reach more than 60% of the power generation growth.
A variety of Government policies have been considered one of the key factors in the growth of renewable energy. An ambitious strength has been observed by countries including developed and developing countries to set targets for renewable energy deployment.
Policies such as feed-in tariffs, research & development programs, and tax credits provided the required strength needed to set the standards of the renewable portfolio.
Also, the decreasing cost of renewable energy technologies led to an important contributing factor to the growth of the renewable energy industry. In recent years, the cost of solar and wind power has been dramatically reduced leading it to be a competitive resource with fossil fuels.
With the two mentioned factors, technological advancement and economies of scale also boosted industry growth. Since 2010, the solar industry saw significant growth due to the fall of solar power costs by over 70%.
According to the reports by IEA, the global solar power capacity reached 500 GW in 2020. The near number is due to the growth majorly seen in China and the United States.
In recent years, the wind industry also experienced significant growth due to the cost falling by around 30% since 2010. According to the IEA reports, the near-global wind power capacity reached about 600 GW in 2020. China, the United States, and Europe are considered to be major contributing growth countries.
However, we cannot deny the barriers seen in the deployment of renewable energy. The lack of infrastructure and transmission capacity for connecting renewable energy sources to the grid is a major issue. Also, the location in remote areas makes it hard to find the skills/workers to relocate, expensive to transmit the power where it is needed.
Lack of storage capacity in the case of solar and wind energy where it requires a steady supply of power. Also, the cost storage technologies such as batteries are expensive and got the limited capacity.
Although, storage technologies are improving and becoming more cost-effective for the growth of renewable energy. Despite, the barriers, the market for the renewable energy industry got a spectacular future with more investment for technology improvement, policies to further increase the capacity as well as the focus on improving the features that are still negatively lacking and hampering the growth of the renewable energy industry.
Source: AlliedMarketResearch