Solar power is set to “take off” globally over the next five years and renewable energy will increase by 50%.
The predictions, from the International Energy Agency (IEA), are the focus of its Renewables 2019 report released this week.
It found that between 2019 and 2024 the world’s renewable power capacity will increase by 1,200 gigawatts. This is the current total power capacity of the United States.
Solar power will account for 60% of this clean energy increase.
Three challenges for clean energy
Despite the IEA’s predictions, some countries may not get the full benefits of the new boom. The IEA report highlights three challenges for renewable energy, all of which apply to Australia:
- System integration of wind and solar PV
- Policy and regulatory uncertainty
- High investment risks
Solaray recently reported on efforts by the Australian Energy Market Operator to integrate renewable energy into Australia’s electricity grid. The operator says a staged transition from coal to clean energy requires a rethink on electricity transmission and storage.
However, the federal government’s politically expedient approach to energy policy has put clean energy on the (gas) backburner.
This in turn affects investors. Investment in a solar farm is risky if there’s a chance of new coal power stations appearing on the network.
Investors need policy certainty
Despite federal government inaction, renewable energy supply is increasing so quickly it’s bringing electricity prices down.
This creates a paradox for investors, since by building more renewable generators they are lowering their return on investment.
In addition, not knowing the government’s position on new coal and gas stations makes it difficult to calculate long-terms returns.
However, earlier this year, Green Energy Markets’ Tristan Edis told ABC News low power prices were not necessarily unworkable.
“We can have lower power prices,” he said. “But for them to be sustained we need a policy framework in place that allows us to steadily build replacement capacity in advance of coal plants retiring.”
Solar PV tripled since 2014
The IEA report states renewables are already the second largest source of electricity worldwide.
It also notes that distributed solar PV systems in homes, commercial solar installations and industry have almost tripled since 2014.
That’s because the transition to clean energy brings lower electricity prices, and installation is currently supported by government rebates.
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