Demand for Renewables in 2020 Showing Few Signs of Abating
This article by Jeffrey Ryser, Senior Editor at S&P Global Platts, originally appeared in Platts Megawatt Daily newsletter.
■ Electricity demand decline of 5% in 2020 expected
■ Stay-at-home policies shift other trends
■ CO2 emissions are down
While electricity demand in the US could fall by as much as 5% for the entire year of 2020 due to the impact of the novel coronavirus pandemic, demand for more renewable energy installations may not slow down, an investment banker said in a webcast Wednesday.
“There may have been some pauses in renewable construction, but in general, the demand for more renewable generation from corporations and utilities is not abating,” said Melanie Nakagawa, director of climate strategy at Princeville Capital in Washington.
Leslie Hodge, an associate at the Baker Botts law firm, said that though permitting delays occurred in March and April, “people are in the market now to invest.” While tax equity availability “may have dipped,” she said, the “biggest players” in the tax equity market have confirmed their commitments through the end of 2020 and potentially into 2021.
Both Nakagawa and Hodge referred in their presentations to the report on global energy demand issued by the International Energy Agency on April 30, which concluded that global lockdown measures were driving “a major shift towards low-carbon sources of electricity including wind, solar PV, hydropower and nuclear,” and that electricity generation from wind and solar “continues to increase in 2020, lifted by new projects that were completed in 2019 and early 2020.”
During the Wednesday webcast hosted by the Dynamo Energy Hub, Nakagawa said that when approximately 3 billion people stay at home due to a pandemic, “energy consumption changes rapidly,” but so do other things.
Nakagawa said that pollution levels “have dropped to their lowest levels in 70 years,” echoing a comment by the IEA that, due mainly to declines in coal and oil use, “global energy-related CO2 emissions are set to fall by almost 8% in 2020, reaching their lowest level since 2010.”
Nakagawa said e-commerce is up 129% year over year. She noted that Zoom Video Communications has said it had 300 million daily users in April, compared to 10 million in December. She argued the way some food markets are now delivering their goods directly to people’s homes “is a convenience that might persist.”
She said electric vehicle sales may be flat this year compared to last, but nonetheless she still expects a 400% growth in the EV charging infrastructure by 2025.
