Global Overview

Renewable energy had another record-breaking year in 2019, as installed power capacity grew more than 200 gigawatts (GW) (mostly solar photovoltaics, PV) – its highest increase ever. As in previous years, government policy was a main driver of both the growth and decline of renewable energy markets. Meanwhile, capacity installations and investment continued to spread to all corners of the world, and the private sector signed power purchase agreements (PPAs) for a record amount of renewable power capacity, driven in large part by ongoing cost reductions in some technologies. (→ See Table 1.)

Wind and solar energy have become mainstream electricity sources and are increasingly cost-competitive with fossil fuel power plants. Nearly everywhere in the world, producing electricity from new renewables is more cost effective than producing it from new coal-fired power plants.2 In a growing number of regions, including parts of China, the European Union (EU), India and the United States, it has become cheaper to build new wind or solar PV plants than to operate existing coal-fired power plants.3 Renewables also are outcompeting new natural gas-fired power plants on cost in many locations, and are the cheapest sources of new electricity generation in countries across all continents (excluding Antarctica).4 (→ See Sidebar 5.)

Although several key countries and regions, such as China, Europe and the United States, have driven these trends and continued to have a large impact in 2019, renewable power is growing in all corners of the world. Globally, 32 countries had at least 10 GW of renewable power capacity in 2019, up from only 19 countries a decade earlier.5 In some countries, the share of renewables in heating, cooling and transport also has grown, although these sectors continue to lag far behind globally.

As in previous years, the use of renewables in the transport sector grew only slightly, and uptake of modern renewables for heating and cooling progressed at a slow pace. Although biofuels continue to dominate the renewable energy contribution in transport, the global stock of electric vehicles (EVs) has grown significantly, increasing opportunities to integrate renewables in road transport. The global market share of EVs remains low overall, however. Electrification of heating in buildings (and to some extent in industry) is garnering policymaker attention, but overall the uptake of renewables in buildings, industry and transport remains constrained by insufficient policy support and by slow developments in new technologies (such as advanced biofuels).

Sidebar 1. The COVID-19 Crisis and Renewable Energy

Sidebar 1. The COVID-19 Crisis and Renewable Energy

As governments worldwide instituted lockdowns in 2020 to slow the spread of the novel coronavirus (COVID-19) and to respond to the resulting global health crisis, economies ground to a halt and energy demand plummeted. Amid the pandemic, oil prices also tumbled due to recent dynamics in the global oil market.

Data for countries representing more than one-third of global electricity demand showed that every month of full lockdown reduced electricity demand 20% on average. Global electricity demand decreased 2.5% in the first quarter of 2020, and demand for coal and oil fell nearly 8% and 5% respectively. Renewables were the only source of electricity to record demand growth over this period, due to low operating costs and preferential access to electricity networks.

The carbon intensity of electricity systems also dropped, and cities across the globe benefited from unusually high air quality. Nonetheless, the concentration of CO2 in the atmosphere continued to rise to record levels even as emissions decreased, highlighting that a structural shift would still be necessary to reach long-term climate and development targets.

The crisis has had immediate implications for the entire renewable energy sector, from network operators facing unprecedented shares of renewable energy generation, to project developers hit by labour and supply chain disruptions. The long-term impacts of the crisis will depend on a multitude of complex and interlinked factors, including the response of governments, markets and societies.

Electricity networks in major markets were able to accommodate huge changes in the energy mix as of mid-2020, despite the challenges of maintaining operations amid social distancing rules. The share of supply met by renewables reached historic highs in China, Europe, India and the United States. In China, thermal power generation dropped 9% in January and February, whereas wind and solar power generation increased 1% and 12% respectively. In the EU and the United Kingdom, coal-based power generation fell 29% between 10 March and 10 April, while renewables delivered 46% of all power generation, up 8% compared to 2019.

Operators in a few regions curtailed renewable power generation in the face of structural challenges: limited options for storing or exporting excess generation; reduced demand-side flexibility as industrial plants went offline; and inaccurate load forecasts owing to a lack of historical data on electricity demand during a pandemic.

Project developers have faced significant labour shortages and supply chain disruptions, although the impacts vary by technology and region. Solar PV projects stalled amid factory closures in China, which accounted for 70% of global module supply as of early 2020, and large job losses were reported by companies reliant on residential installations.

Impacts to the onshore wind power supply chain raised the possibility that force majeure clauses would be invoked to stop work on projects, triggering a chain reaction that reverberated across the sector. Although the majority of European wind turbine and component factories continued to operate, supplies of components and materials from China were interrupted, and a number of turbine manufacturers withdrew their earnings guidance for investors. Offshore wind power was largely unaffected in the short term, as most projects were in the late stages of construction as of mid-2020.

To ensure that such delays did not cause developers to miss deadlines for financial support and tax credits, some governments moved quickly to extend deadlines for such policies.

Distributed renewables for energy access (DREA) systems proved invaluable in many rural and remote communities during the early phases of the pandemic, powering health facilities and other essential services. However, measures to contain the virus imperiled projects and the future of the sector, leading to calls to recognise DREA as an “essential service”, to fast-track procurement and funding procedures, and to establish relief funding.

Suppliers faced difficult choices in relation to power purchase agreements, risking cash-flow shortages if they continued to pay generators under existing PPAs, while delayed payments would expose them to potential legal action in the future. At the same time, some developers signalled that they would be hesitant to negotiate new PPAs while power prices were unusually low.

Analysts widely expected an economic recession to follow the immediate health crisis, placing pressure on public and private budgets that could affect investment in renewables. There already was an unprecedented downturn in stock markets and a reduction in the availability of credit, and lenders began requesting more granular detail on new renewable energy projects in the face of uncertainty about future demand. Renewable energy technologies that compete against fossil fuels also were under pressure from low oil and gas prices. The capacity of developers to cope with such short-term shocks varies – those with strong balance sheets have been able to absorb additional costs, while others face cash-flow shortages.

As the focus has shifted from rescue to recovery, governments have considered options for “building back better”i. A comprehensive study of fiscal recovery packagesii concluded that “green” recovery measures, such as investment in renewables and building efficiency, are more cost effective than traditional stimulus measures, creating more jobs and delivering higher returns. Renewable energy also offers a range of other proven benefits, including increasing energy security, reducing emissions and improving human health.

Calls for a “green recovery” have gained momentum, with a broad coalition of actors from all corners of society advocating an ambitious stimulus package that: prioritises renewable energy, energy efficiency, grid modernisation and resource-efficient transport; makes bailouts for emissions-intensive industries conditional on emissions reductions; promotes “green finance”; and puts a price on carbon.

iA term adopted by the international community in the Sendai Framework for Disaster Risk Reduction 2015-2030.i

iiThe study considered 700 stimulus responses to the 2008 financial crisis and surveyed 231 central bank officials, finance ministry officials and other economic experts from G20 countries on the relative performance of 25 major fiscal recovery archetypes.ii

Source: See endnote 1 for this chapter.

Actors at the local level are having a substantial impact on the uptake of renewable energy. Cities are responsible for many local policies and services that impact the uptake of renewables, especially in buildings and transport. Often, local governments set more ambitious targets and implement more ambitious policies than their national counterparts. (→See Box 1.) Among the general public, a global consensus on support for renewable energy continued to advance in 2019 alongside rising awareness of the multiple benefits of renewables, such as improved public health through reduced pollution, increased reliability and resilience, mitigating climate change, increased access to modern energy services, reduction of energy poverty and job creation.6 (→ See Sidebar 2 and Feature chapter.)

BOX 1. Renewable Energy in Cities

BOX 1. Renewable Energy in Cities

Cities play an important role in the effort to address climate, energy and sustainable development issues. They account for around two-thirds of global final energy use and some three-quarters of global CO2 emissions. At the same time, local governments have a direct impact on the daily lives of their citizens, such as through urban planning decisions or providing urban services, including public housing, waste and wastewater management, and public transport. They are well positioned not only to grow the use of renewable energy in municipal operations, but also to encourage and support the deployment and use of renewables in cities more broadly. Thus, cities can play a major role in advancing the transition towards renewable energy in the heating and cooling and transport sectors, to accelerate deployment in the power sector, and to foster the integrated approaches needed to decarbonise energy use in all sectors.

Globally, thousands of cities have adopted renewable energy-specific targets and action plans, and by mid-2019 more than 250 cities worldwide had targets for 100% renewable energy, not only for the power sector, but also covering heating and cooling, and transport. To achieve these targets, many cities have adopted renewable energy (and energy efficiency) measures for buildings, for example through financial and fiscal incentives for the installation of solar PV or geothermal systems. Cities also can link the development of renewables with other urban services, such as by using waste and wastewater to produce biogas and biomethane, simultaneously improving waste management and supporting the local production and use of renewables. As the electrification of transport gains momentum, some cities are facilitating the integration of EVs and renewable power supply, installing EV charging stations or public transport infrastructure that relies on renewable electricity.

Renewable energy deployment in cities is often part of wider urban strategies to develop infrastructure, while at the same time achieving local objectives such as reducing air pollution to improve public health, mitigating climate change, creating jobs, supporting the local economy and building resilient infrastructure.

REN21’s Renewables in Cities Global Status Report series is establishing continuous and reliable data on urban renewable energy developments in order to create a clearer and more comprehensive picture of renewables in cities around the world. (→ See https://www.ren21.net/cities.)

The private sector is purchasing more and more renewable electricity. Corporate sourcing of renewable power set a record in 2019, with nearly 20 GW of PPAs signed in 23 countries during the year.7 This accounted for around 40% of the 50 GW of PPAs signed by firms over the previous decade.8 Most of the 2019 activity was in the United States, as Google became the world’s largest corporate buyer of renewable power, adding 2.7 GW throughout the year.9 Corporate sourcing of renewables also continued to rise in Europe and to spread in other countries worldwide.10 By early 2020, more than 229 leading global corporations had joined the RE100 initiative – committing to using 100% renewable power – up from 167 corporations a year before.11 (→See Box 3 in Policy Landscape chapter.)

Despite an increase in final energy demand, global energy-related carbon dioxide (CO2) emissions did not grow in 2019, following two years of increases.12 This flattening was due mainly to declines in emissions from the power sector in some countries, which were related mostly to improvements in energy efficiency and to rising shares of renewable energy, but also to some extent to fuel switching from coal to gas.13

Momentum for renewable energy continued to build in 2019. Governments and businesses alike made additional commitments and showed increased ambition. More actors also showed support for renewables and took action to tackle climate change, which often directly or indirectly supports renewable energy uptake. Notable developments during the year included:

Climate strikes – driven by young people – took place in at least 150 countries worldwide, reflecting a growing sense among youth of the urgency of action on climate change.14 By year’s end, 1,480 jurisdictions – spanning 28 countries and covering 820 million citizens – had issued “climate emergency” declarations.15 In parallel, opinion polls across several countries demonstrated increased awareness of climate change and strong public support for renewable energy.16

More institutions committed to divestingi either fully or partially from fossil fuels, including the European Investment Bank, Norway’s sovereign wealth fund and the US investment bank Goldman Sachs.17 Combined, global divestment totalled USD 11 trillion of managed assets by year’s end.18 Meanwhile, the first major divest-invest conference in the Global South was held with delegates from more than 44 countries.19

The G5 Sahel heads of state endorsed Desert to Power, an initiative by the African Development Bank that aims to guarantee access to renewable electricity in 11 African countries in the Sahel region.20

Globally, 77 countries, 10 regions and more than 100 cities announced their commitment to net zero carbonii emissions by 2050, and the European Commission proposed a European Green Deal roadmap to create the first carbon-neutral continent by 2050.21

The Zero Carbon Buildings for All Initiative, launched in 2019 at the United Nations Climate Action Summit, aims to develop decarbonisation roadmaps for buildings and to mobilise USD 1 trillion in funding by 2050.22 In the maritime industry, leaders launched the Getting to Zero Coalition with the objective of operating zero emission vessels along deep-sea trade routes by 2030.23

More than half of the countries that have submitted Nationally Determined Contributions (NDCs) towards reducing greenhouse gas emissions under the Paris Agreement have noted interest in implementing a carbon tax; however, by year’s end carbon pricing initiatives were in place in only 47 countries around the world, covering 20% of global emissions.24 Furthermore, although 132 NDC plans mentioned renewables in the context of the power sector and 112 mentioned energy efficiency, only 25 plans mentioned renewable energy in the context of heating and cooling, and 25 in the context of transport.25

Several cities adopted commitments to reduce greenhouse gas emissions, including 94 mayors who announced their support for a Global Green New Deal for cities, committing to limiting global warming to 1.5 degrees Celsius (°C) above pre-industrial levels.26 As of mid-year, nearly 10,000 cities and local governments had committed to jointly reducing emissions through the Global Covenant of Mayors for Climate & Energy.27

Investment in renewable energy again grew in 2019, albeit slowly, and much more investment flowed to renewable power technologies than to other electricity-generating technologies, including coal, natural gas and nuclear power generating plants.28 Overall, global new investment in renewable power and fuels grew 2% compared to 2018 – as costs continued to decrease – reaching some USD 301.7 billion.29 Wind and solar power accounted for nearly all of this investment; notably, investment in wind power outweighed investment in solar power for the first time since 2009.30

China and other developing and emerging economies accounted for a higher share of total renewable energy investment than developed countries for the fifth consecutive year, and China again had the highest total investment despite a decrease for the second year in a row.31 (→ See Investment chapter. and Table 2.) Several small-island developing states – such as Dominica, Nauru and the Solomon Islands – invested equivalent or higher amounts in renewable power and fuels than developed countries on a per gross domestic product (GDP) basis.

The growing trend among major energy companies to invest in renewable energy highlights both the cost-competitiveness and public appeal of renewables. The world’s largest oil and gas companies continued to invest in the renewable energy sector in 2019 (as well as to acquire companies already active in the sector) and to invest in enabling technologies such as electric mobility.32 Many electric utilities also have made commitments to shift their electricity production to 100% renewable. (→See Power section in this chapter.)

Even so, major fossil fuel companies still invested heavily in oil and gas extraction projects, and only a minor share of their overall investments goes to the renewable energy sector, with some companies expected to miss their own “green energy” investment targets.33 In addition, these companies and the coal industry continued to spend upwards of USD 200 million annually on lobbying to delay, control or block climate change and renewable energy policies, and on advertisements to influence public opinion.34

Distributed renewable energy systems continued to provide remote households with access to electricity and clean cooking services in developing and emerging countries. In 2018, around 171 million people had access to electricity through solar PV lighting, solar home systems and renewable-based mini-grids.35 The global population without access to electricity continued to shrink, although 860 million people (11% percent of the world’s population) still lacked electricity access in 2018, nearly 70% of them in sub-Saharan Africa.36

Countries adopting integrated planning – an approach to electrification that includes grid extension, mini-grids and solar home systems – have achieved faster results in electricity access; in recent years, Bangladesh, Cambodia, India, Kenya, Myanmar, Nepal, Rwanda and Tanzania experienced the most rapid gains in electrification.37 In parallel, an estimated 450 million people gained access to cleaniii cooking fuels and technologies between 2010 and 2018, although primarily using liquefied petroleum gas (LPG).38 In 2018, the global population lacking access to clean cooking remained unchanged at around 2.6 billion people.39 (→See Distributed Renewables chapter.)

Despite the growing deployment of renewable energy around the world, the share of renewables in total final energy consumption (TFEC) has seen only a moderate increase. As of 2018iv, modern renewable energy (excluding the traditional use of biomass) accounted for an estimated 11% of TFEC, only a slight increase from 9.6% in 2013.40 The largest portion was renewable electricity (5.7% of TFEC), followed by renewable heat (4.3%) and transport biofuels (1.0%).41(→ See Figure 1.)

Figure 1

The slow increase in the share of renewables has occurred despite tremendous growth in some renewable energy sectors. Total demand for modern renewables grew strongly (7.3 exajoules, EJ) between 2013 and 2018, rising around 4.0% annually.42 Nearly half of this growth (48%) was due to consumption of electricity from wind power and solar PV.43 During the 2013-2018 period, TFEC grew 25.3 EJ, or around 1.4% annually.44 Thus, renewable energy increased at nearly three times the rate of TFEC, accounting for 29% of the total increase in energy demand.45

However, this means that other energy sources (predominantly fossil fuels, growing at a rate of 1.3% annually) accounted for 71% of the total increase in energy demand, highlighting the challenge that renewables faced in gaining greater TFEC shares during the five-year period.46 (→See Figure 2.) This slow progress points to the complementary roles of energy efficiency and renewables in reducing the contributions of fossil fuels in meeting global energy needs.

Figure 2

The share of renewables in final energy demand varies depending on how this energy is used. The highest share of renewable energy use is in the power sector (excluding electricity for heating, cooling and transport), such as lighting and appliances in buildings, where it continues to grow quickly.47 However, these end-uses accounted for only 17% of TFECv in 2017.48 Energy use for transport represented some 32% of TFEC, and had the lowest share of renewables (3.3%).49 The remaining thermalvi energy uses, which include space and water heating, space cooling and industrial process heat, accounted for more than half (51%) of TFEC; of this, some 10.1% was supplied by renewables.50 (→See Figure 3.)

Figure 3

A key reason for the low penetration of renewables in the final end-uses of thermal and transport energy is the lack of supporting policies in these sectors. Renewable energy targets are in place in nearly all countries, and the number of renewable energy support policies again increased in 2019, mostly for renewable electricity. However, the number of countries with mandates for renewable heat did not grow, and policy examples for renewable energy support in industry remained scarce. No new countries added regulatory incentives or mandates for renewable transport, although some countries that already had mandates added new ones or strengthened existing ones. Only one country (Austria) had a policy directly linking renewables and EVs by year’s end.51 (→ See Policy Landscape chapter.)

Conversely, policies and targets at the sub-national level tend to be more ambitious and often are more integrated than those at the national level.52 In addition, the renewable energy sector is greatly influenced by trade policy: a growing number of protectionist measures in recent years has restrained the growth in trade in renewable energy products. (→ See Sidebar 3.)

Another challenge to increasing the share of renewables has been persistent subsidies for fossil fuel consumption and production. Global subsidies for the consumption of fossil fuels reached an estimated USD 400 billion in 2018, a 30% increase from the previous year.53 For context, this is more than double the estimated support for renewable power generation.54 Whether supported by subsidies or not, low prices for fossil fuels encourage further demand for these fuels and challenge renewable energy markets.55 The true cost to society of fossil fuels is an estimated USD 5.2 trillion, including the estimated costs of negative externalities such as air pollution, effects of climate change and traffic congestion.56

In many countries, investment in new fossil fuel production and related infrastructure continued. While some countries were phasing out coal, others invested in new coal-fired power plants, both domestically and abroad. Many coal-fired plants announced closures in Europe and the United States, whereas most of the still-operating and new plants were located in developing and emerging Asia.57 Public finance from China funded by far the largest amount of coal capacity in other countries, followed by funding from Japan, the Republic of Korea, France, Germany and India, nearly all of which was directed towards developing and emerging countries.58 Funding from private banks for fossil fuel projects also has increased annually since the signing of the Paris Agreement in 2015, totalling USD 2.7 trillion between 2016 and 2019.59 Conversely, the European Investment Bank announced in 2019 that it would stop funding fossil fuel projects beginning in 2021.60

Although energy-related greenhouse gas emissions remained stable in 2019, the world is not on track to limit global warming to well below 2 °C, let alone 1.5 °C, as stipulated in the Paris Agreement. Moreover, the annual review of the United Nations’ (UN) Sustainable Development Goal 7 (SDG 7) reiterated that the objectives for renewables, energy efficiency and energy access for 2030 will not be achieved unless efforts are greatly scaled up. Global climate protests have underlined the growing public pressure for political action, but the annual UN climate conference held in Madrid, Spain in December 2019 concluded without any meaningful agreement.61 The UN later announced that the 2020 meeting would be postponed, thus increasing the uncertainty about when such agreement would be reached.62

The following sections discuss key developments and trends in renewable energy in 2019 in the sectors of buildings, industry and transport, followed by a discussion on renewable power capacity and renewable electricity generation.

Table 1. Renewable Energy Indicators 2019

Table 2. Top Five Countries 2019