The future of energy is renewable. In the last few decades, governments have made substantial commitments to decarbonize our energy system. The global fight for sustainability has caused renewable markets to mature, bringing costs down and making renewables far more accessible. BCC Research estimates that by 2027, the global renewable energy market will reach $1,500 billion, with growth coming in at an annual rate of 10%.
Scientists, climate activists, and governments have been heralding an era of renewables for decades. Now, the private sector is beginning to address the urgent need for clean energy. The path to a stable and sustainable future isn’t easy, but the exponential growth of the market will make the journey smoother.
The power of solar
Solar energy has reached almost every corner of the world. It’s been the champion of the renewable energy space, used for both small-scale domestic applications as well as large-scale industrial settings. Within the next five years, solar power will eat into hydroelectric power’s mammoth market share, emerging as the leading form of renewable energy.
The high efficiency and falling costs are the primary reason for the solar power market’s rapid expansion. Solar PV systems have the edge over wind turbines, generating electricity with 42% efficiency over 40%. Plus, they’re far easier to install and maintain than their counterparts.
In recent years, Europe has emerged as a key market for solar PV modules. A glut of investment in Europe led to an overabundance of solar PV modules and decline in demand, which has impacted global prices. Manufacturers have adopted price-skimming strategies to follow the demand curve for solar.
And compared to other forms of renewable energy like hydroelectric and wind, installation and maintenance costs for solar pale in comparison. Cost-wise, solar energy is a clear winner, helping carve its future position as the leading form of renewable energy.
Blown away: What wind can do
Installing wind farms entails some serious costs. Wind turbines are enormous structures that must be rooted deep underground. Digging at such great depths can cause soil erosion and even landslides, which pose some difficulty for the market going forward. But the high level of efficiency and lack of fuel costs is causing countries that are highly dependent on fossil fuels to shift their focus to developing wind farms.
Brazil and South Africa are expected to emerge as top wind power markets in the near future due to increases in their cumulative capacity. Favorable government policies in Latin American and Asian countries are expected to boost the global market for wind energy over the forecast period. However, the rapid strides taken by Middle East countries put the region on par with Latin America in terms of cumulative installed capacity.
Changing tides for ocean energy
It’s been a small force in the renewable energy landscape, accounting for just 0.02% of the total market. But ocean energy will experience high growth over the next few years, expanding at a CAGR of 22.4% through 2027. Over the past 10 years, the ocean energy industry has invested an estimated $1.1 billion in capital to move concepts from the drawing board to deployment in EU waters. As part of the overall momentum toward renewables, marine energy is poised for expansion.
Large-scale, marine installations such as Blue Energy’s tidal bridge will help to increase this percentage of renewables in the global production of electricity. In 1966, the largest tidal power station in the world was built in St. Malo, France. This ocean tidal power station still operates, producing 240 MWh of power each year. In 2017, the Chinese government supported marine renewable energy projects with a total budget of $20.8 million (RMB 137 million) granted to four marine energy projects. Since 2010, China has committed approximately $0.19 billion (RMB 1.25 billion) to marine energy R&D.
The problem with hydroelectricity
Hydroelectric is one of the oldest forms of renewable power. It can reliably produce huge amounts of clean energy, which explains why it has been the biggest source of renewable energy in the world. But there is a slew of economic and social issues associated with hydroelectricity that are putting the brakes on the expansion of this sector.
The construction of hydropower plants can be ecologically devasting. Due to their sheer size and scale, developments can cause significant land displacement, resulting in the loss of fisheries and local tourism, as well as flooding agricultural and forest lands. According to the independent World Commission on Dams, most projects fail to compensate affected people for their losses and to adequately mitigate environmental impacts. Locals have rarely had a meaningful say in whether or how a dam is implemented or received their fair share of project benefits.
In China, over 23 million people have experienced land dislocation due to the country’s extensive hydroelectric initiatives. Moreover, statistics suggest that around 30% of China’s rivers are severely polluted because of river flow alterations as a consequence of dam construction. The ecological impacts have turned hydroelectric into the slowest-growing source of renewable energy.
The future of renewable energy
Emerging technologies are influencing the market and various external factors are at play. Regardless of the internal dynamics, renewable energy will be an increasingly vital part of society. For those operating within the sector, understanding the nuances of the renewable energy market will help guarantee long-term industry success.
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