BAKU, Azerbaijan, December 4. Global renewable energy capacity is expected to grow from 3.6 TW last year to approximately 11.2 TW by 2030 to align with a 1.6-degree global warming scenario, Trend reports.
According to Rystad Energy, an independent energy research and business intelligence company from Norway, the supply chain is poised for rapid expansion, but an acceleration in the rollout is imperative. Streamlining permitting processes and addressing short-term financing challenges, such as high interest rates, are crucial for achieving the necessary capacity by 2030.
Rystad Energy's most recent modeling indicates that, while solar PV is expected to contribute about 65 percent to this expansion, there is work to be done to set the world on this trajectory. Existing projects, policies, and industry trends project global renewable generation capacity to reach only 8 TW by 2030, potentially delaying the target of 11.2 TW until at least 2034.
To expedite renewable developments, reforms in permitting processes in the West, policy support in Asia, and optimization of the global solar supply chain are essential. Implementing Contracts for Difference (CfDs) in markets with high renewable penetration can mitigate financial risks, ensuring stable investment in renewable energy projects and overcoming challenges like price cannibalization, the analysts say.
Furthermore, ineffective subsidies promoting the consumption of fossil fuels introduce a notable distortion into global energy markets. As Rystad Energy explained, these subsidies not only foster inefficient and heightened use of fossil fuels but also generate unclear price signals for fuel efficiency, imparting an unjust advantage to the adoption of clean energy technologies.
Advocating for systematic and gradual fossils phase-out, Rystad Energy proposes an approach to level the playing field. This strategy aims to reorient market dynamics towards sustainable energy practices and ensure a seamless transition for economies and consumers habituated to subsidized energy prices.
