Renewable energy industry trends, impact on geographies worldwide
From thriving on the existence of fossil fuels, the world has witnessed a tremendous change over the last two decades in adoption of renewable energy industry sources. Bearing testimony to this evolution is the increasing preference of renewable energy sources over their finite counterparts. For instance, the U.S. military announced that they plan to implement a massive project that has been in the talks for over a decade, to convert their fuel-based operations to renewable energy operations.
Energy obtained from fossil fuels are non-renewable, i.e., they are bound to get exhausted at some point or the other. Renewable energy industry, on the other hand, has products generated from natural resources such as biomass, wind, tides, geothermal, water, and sunlight. This energy can be easily replenished and is not subject to decline. The urgent need to curb rising environmental issues, such as global warming, pollution, habitat loss, and greenhouse gas emissions (methane contributes to more than 2% of the greenhouse gas emissions in the U.S.), the impact of non-renewable energy sources on human health, air pollutants, and most importantly, the dwindling of finite energy sources will drive renewable energy market.
The sun is one of the prime renewable energy industry sources. Solar energy can be used for power generation, lighting buildings, heating purposes, and myriad other commercial uses. High demand and the increased usage of solar panels, solar batteries, solar cookers, solar geysers, and other solar-powered appliances will drive solar energy market size, which was valued at more than USD 65 billion in 2015 and is expected to be worth more than USD 140 billion by 2023.
Wind and tidal energy are also major renewable energy industry sources that are heavily implemented across the globe. Wind energy is generated by means of wind turbines that capture this energy, driven by the motion of the wind and the Earth’s rotation. A report by Global Market Insights, Inc., state that offshore wind energy market size is expected to be valued at more than USD 130 billion by 2023.
Biomass is an organic substance that comprises biogas, landfill gas, ethanol, alcohol fuels, solid waste, wood and wood waste, and biodiesel. Increased biomass usage as fuels in direct combustion power plants for generation of electricity will propel organic biogas market, which was worth more than USD 19.5 billion in 2015 and is projected to increase at a CAGR of 6% over 2016 to 2023, registering a revenue of more than USD 32 billion by 2023.
With a view to combat problems arising due to exhaustible sources, the governments of various countries have defined goals to increase the usage of infinite energy sources. Favorable initiatives, a strict regulatory framework, and increased R&D investments will fuel global renewable energy market.
Renewable energy industry trends in India
India ranking 5th amongst the highest power generating regions worldwide with a capacity of 44.812 GW, is slated to expand its renewable energy base to 175 GW by 2022. As on 31st July, 2016, the renewable energy industry in India accounted for approximately 14.5% of the overall country’s installed capacity. The set target of 175 GW comprises 100 GW from solar power, 60 GW from wind power, 5 GW from small hydropower, and 10 GW from biomass power. The active partaking of the government and private entities in the innovation and deployment of clean energy resources will give the renewable energy industry in India a major push making it the biggest opportunity hub for the investors.
Renewable energy industry in India has witnessed a major renewable energy capacity addition over the last two years, i.e. from 2014 to 2016. Below is a series of major developments across this industry in the last two years:
• Solar power capacity saw a 157% increase in the last two years reaching a capacity of 4132 MW
• On September 21, 2016, world’s largest solar power plant with a capacity of 648 MW was commissioned in Tamil Nadu
• A sum of INR 356 crores (approximately) has been sanctioned to Solar Energy Corporation of India for development of 34 solar parks across 21 states with an aggregate capacity of 20,000 MW
• A 3300 MW wind power capacity addition was made during 2015-16
As per a report, “Global Trends in renewable energy investments 2016” by UN Environment Program (UNEP), India holds the tenth position amongst the countries spending in renewable energy.
Renewable energy industry trends in the U.S.
The United States has been one of the leading regions pertaining to the adoption of renewable energy sources for power generation. As of August 2016, U.S. renewable energy market contributed to more than 16% of the overall U.S. power generation market share. Support for integrating renewable energy sources, government and private funding, favorable clean energy policies, and increased R&D spending will catapult U.S. renewable energy industry to great heights, creating multiple opportunities for major corporations.
A recent study states that renewable energy is estimated to supply for more than 75% of the total power generation in the U.S., by the year 2050. Wind and solar energy are predicted to account for approximately 50% of this share.
Renewable energy industry in the U.S. has witnessed the following trends in the last couple of years:
- Non-hydro renewable energy contributed to more than 4% of power generation in the U.S. and is expected to grow threefold by 2020
- Geographically, wind energy contributed to more than 30% and 36% of the overall electricity generation in South Dakota and Iowa respectively
- Wind energy from states such as North Dakota, South Dakota, Kansas, Oklahoma, and Iowa, accounted for more than 20% of the overall power generation
- An 8,727 MW wind capacity was added in 2016
- Wind energy capacity is anticipated to cross 90,000 MW by 2018
- Currently, the wind energy industry is fueled by the availability of more than 50,000 turbines, given that the nation invested nearly USD 14 billion in new turbines
- As of March 2017, total hydropower capacity is 79,985 MW, while total wind capacity is 81,312 MW, owing to which U.S. wind energy market has overtaken hydropower energy market
Renewable energy industry trends in Europe
Europe is a massive continent, with an overall population of more than 743 million, as per the 2015 census. As of 2014, total power generation of the continent amounted to over 3 million GWh. A recent report states that out of the total power generation capacity (more than 24 GW) installed across Europe in 2016, renewable sources accounted for more than 85%. A huge population, increased power consumption, highly developed infrastructure, and rapid industrialization will drive Europe renewable energy market. With the depletion of fossil fuels and the harmful effects of finite energy sources, power generation market will observe significant growth over the next few years.
Here are some of the key statistics related to Europe renewable energy industry in the last few years:
- Renewables contributed to more than 25% of the Germany’s overall power generation in 2014
- Renewable energy sources accounted for more than 30% of the power consumption in Germany in 2016
- Solar energy contributes to more than 75% of a single day’s power demand in Germany
- Renewables contributed to more than 45% of the overall electricity generation and more than 8% of the total power consumption in the U.K. in 2015
- An energy supply of approximately 130 TWh annually, from biomass energy sources, will help fulfill the U.K. government’s commitment to reduce greenhouse gas emissions by 80%, by the year 2050
- Power generation from wind farms is enough to supply electricity to more than 6 million homes in the U.K.
The paradigm shift from non-renewable energy to renewable energy will prove to be highly advantageous for power generation and consumption, with major companies increasingly investing in wind and solar power. Mergers & acquisitions is a key strategy across this sector, for instance, Leap Green Energy, backed by JP Morgan, recently took over the wind power assets of Inox Renewables. Favorable government policies, tax incentives, funding, and R&D investments will be a mandate for the renewable energy industry to flourish.
This article originally appeared on Global Market Insights. Global Market Insights is a content partner of CFE Media.