The costs of wind and solar energy have decreased by 10% over the course of 2019, according to the latest data released by Capgemini.
Bureau of Land Management
The 2020 edition of the World Energy Markets Observatory (WEMO) recorded consistently lower costs being recorded month after month throughout the year.
The WEMO analyses the evolution of electricity and gas market across Europe, North America, South-East Asia, Australia, India and China and examines topics such as climate change and regulation, energy transition, infrastructure and adequacy of supply, transformation and financial benefits.
A new key observation of the 2020 report was that lithium-ion batteries used in stationary storage and electric vehicle markets decreased by 19% throughout the year, with 88 of the 115 lithium-battery megafactories launched being located in China.
Another key observation was a general drop in consumption owing to Covid-19, leading to the largest reductions in greenhouse gas emissions since the Second World War, though the long-term effects of this temporary reduction are still up for debate.
The report predicts a further emissions drop of 7-8% in 2020, owing to tighter lockdown regulations and less travel owing to the pandemic.
The data also found that increasing geopolitical tensions have made energy markets far more unstable. The ongoing Nord Stream 2 controversies or the Boeing-Airbus feud between the US and EU are prominent examples.
Economic growth across the globe has slowed down in 2019, with GDP growth for G20 countries falling 0.8% below 2018 levels and energy demand slumping with a minuscule 0.7% increase as compared with 2.2% for 2018.
The energy sector's overall carbon emissions decreased by 0.4% in 2019, despite a record-breaking increase of 0.6% worldwide. Reduced demand for coal and a shift to renewable energy is primarily responsible for this drive.
The data suggests an overall shift away from carbon-emitting technology will be instrumental in increasing the economical viability of renewable energy.
However, the global domination of coal and fossil fuels are set to continue to hamper moves towards a full green shift.
Capgemini energy and utilities senior advisor Colette Lewiner said: “This 2020 emissions decrease is linked to the lock-down period and remaining mobility restrictions.
“Emissions will likely rise again as the world recovers from the pandemic. By way of illustration, it would take a similar restriction, every year for the next 10 years, to get on the right environmental trajectory, which is of course unviable. Profound changes are needed to reach climate change objectives.”
Owing to the shared market value of solar and wind energy on top of more traditional energy sources, the report warns that grid balancing could prove difficult.
Despite this, the report shows that renewable electricity had an unprecedented market share on the grid during the coronavirus-based lockdowns owing to reduced energy consumptions overall.
Capgemini energy and utilities head Philippe Vie added: “Numerous digital tools and assets are mature and available to improve predictability, reliability, grid stability and finally the security of supply, accelerating Energy Transition.”
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