Renewable energy sources have demonstrated their reliability and relative cost-efficiency as lockdown measures due to the Covid-19 pandemic have cut demand for fossil fuels and this should serve as an incentive to accelerate green investments, according to a new DNV GL report.
The Norwegian risk management and classification outfit is predicting rapid growth for renewables over the next decade due to decreasing costs for wind and solar, having previously predicted that they would account for 66% of global electricity production by 2050.
However, it stated in its latest report on the energy transition that investment needs to be drastically scaled up in a range of new technologies including floating renewables, battery storage, carbon capture and storage, and hydrogen, backed by government policy support, to meet the climate goals of the Paris Agreement.
“Solar and wind power generation has demonstrated that it can reliably supply a larger proportion of energy demand” during the pandemic, according to Ditlev Engel, chief executive of DNV GL Energy.
He said these renewable sources have “proven their resilience” in providing power both for residential and industrial markets as consumption of oil, gas and other fossil fuels has declined due to reduced demand from the transport and manufacturing sectors during national lockdowns.
The report stated: “This drop in the demand for hydrocarbons coupled with the cost-effectiveness of renewable energy will hopefully give more traditional investors the push they need to view renewables more favourably.”
Oil may have already reached a supply plateau, and natural gas is set to take over from crude as the largest energy source in the 2020s, according to DNV GL.
The report outlines a number of targeted measures required to transition to green energy that include expanding solar power more than tenfold to 5 terawatts and wind fivefold to 3TW of installed capacity by 2030.
There also needs to be a 50-fold increase in production of batteries for the 50 million electric vehicles needed by 2030, as well as annual investment of $1.5 trillion for the expansion and reinforcement of power grids by 2030, and rapid and wide-scale deployment of carbon capture, utilisation and storage facilities.