The renewable energy market is expected to achieve 154.6GW of new energy capacity by the end of this year. Majority of that energy capacity will come from solar photovoltaics with almost 90GW, followed by wind with 53GW.
Investment in biomass, geothermal and small hydro-power plants will grow as well as a result, say the firms’ analysts. Growth is not expected to be as fast as solar and wind power investment due to the more limited resource availability, higher risks and upfront capital costs. Investment in ocean-based power capacity will continue to increase in 2018 as well, but it will take some time before they reach the levels attained by solar and wind power generation.
The renewable energy market is driven by factors that include rising electricity demand, decarbonisation goals and government incentives. On the other hand, market expansion is being challenged by resource unavailability, high risks associated with investing in the market and the high upfront costs required to implement a project.
Asian investment is expected to be $114.98bn, accounting for 58% of the global total installments in 2018. Solar, wind and biomass will account for 96% of the total investments. Investments by stakeholders in North American are expected to reach $33.17bn, although low natural gas prices and the current US administration’s measures are significant barriers to renewable energy development.
Latin America will reach $17.7bn in investments owing to the heavy focus on renewables in countries including Mexico, Argentina, Brazil, and Colombia. In Europe, investments are driven by efforts by the region to meet 20% renewable in the energy mix by 2020 and 32% by 2030, under goals set under the Renewable Energy Directive.
Frost & Sullivan Energy & Environment Senior Industry Analyst Maria Benintende stated: “The future of renewable power will be hybrid, with special emphasis on storage solutions. The pace of growth will depend on the level of government backing in terms of setting up support mechanisms to enable 100% renewable energy generation.”