switzerlanden
Thanks a trillion! World reaches renewable energy milestone

Thanks a trillion! World reaches renewable energy milestone

12-09-2018 | Insight

Renewable energy has hit a new milestone, with one trillion watts of wind and solar capacity now installed.

  • Chris Berkouwer
    Chris
    Berkouwer
    Equity Analyst

Speed read

  • Wind farms and solar panels can generate 1 TW of electricity
  • Colossal new projects are being installed around the world
  • Two-thirds of global power should be renewable by 2050

Wind farms and solar panels can now generate more than one terawatt of electricity around the world, according to the Bloomberg New Energy Finance (BNEF) database. At the end of June 2018, global installation capacity could generate 1,013 gigawatts, with 54% coming from wind and 46% from solar, the data revealed.  

Although this one terawatt only constitutes roughly 6% of the total global electricity consumption, it could still power about 10 billion 100-watt home lightbulbs.1 BNEF predicts that the second terawatt will be generated within the next five years and will cost 46% less to install than the first. Total installed wind and solar capacity has now quadrupled since 2010 and grown 65-fold since 2000, the data shows.

As the world battles global warming, replacing fossil fuels use with natural energy sources from wind, solar, hydro or biomass is turning renewables from niche to mainstream. The industry is reaching critical mass, to the point where it is replacing traditional industries such as coal without the need for subsidies.

Stay informed on Sustainable Investing with monthly mail updates
Stay informed on Sustainable Investing with monthly mail updates
Subscribe

Global wind and solar installations, cumulative to June 30, 2018

Source: Bloomberg NEF. Note: 1H 2018 figures for onshore wind are based on a conservative estimate; the true figure will be higher. BNEF typically does not publish mid-year installation numbers.

The statistics that illustrate just how far renewable energy has come read like a shopping list of superlatives. Morocco, for example, is building a solar farm in the Sahara Desert that will be the size of Paris. The colossal USD 9 billion project covering 1.4 million square meters will eventually generate enough electricity to power more than one million homes.2

UK leads in offshore wind

Perhaps surprisingly, the country that now leads the world in offshore wind turbines is the island nation of Britain, with more than 1,400 turbines already installed, including the world’s largest wind farm – the ‘London Array’ field in the North Sea. Together with onshore turbines, they currently provide enough energy to power four million homes.3   

The wind turbines themselves are becoming larger than skyscrapers. In April, GE Renewable Energy announced plans to install the world’s largest wind turbine in north-east England – a 260-meter tall machine with blades 107 meters long. It will be almost as high as the UK’s tallest building, the 306-meter Shard tower in London.4    

The UK is a good example of how renewables are gradually replacing traditional reliance on fossil fuels. In 2016, the country generated more electricity from renewables – mostly wind farms – than coal for the first time. In April 2018, Britain went more than two days without using coal power for the first time since coal-fired stations were built in the late 19th century. The UK also possesses Europe’s largest floating solar park and has a significant presence in biomass.5  

Global efforts intensify

Across the world, a UN report published in April showed that more money was in invested in solar energy than in coal, gas and nuclear combined in 2017, with China leading the way. A record 157 gigawatts of installations using renewable sources – equivalent to about 200 large coal-fired power stations – was commissioned in total. Globally, the proportion of energy generated by renewables has risen from about 5% to 12% in a decade. This translates to around 1.8 trillion tons of carbon dioxide emissions being avoided last year – the equivalent of removing the entire US transport system.6

The transition forms part of attempts to meet the Paris Agreement of 2015 and limit global warming to between 1.5 and 2 degrees Celsius above pre-industrial levels. The EU’s Europe 2020 targets include commitments to reduce greenhouse gas emissions by at least 20% compared to 1990 levels; increasing the share of renewable energy in final energy consumption to 20%; and moving towards a 20% increase in energy efficiency.7

It is also creating millions of jobs. Employment in the renewable energy industry has topped 10 million people for the first time, a 5.3% rise since 2017, according to the International Renewable Energy Agency. Almost half of this tally is in China, while 14 times as many people in the US work in the renewables sector than in the coal industry.8

Stunning statistics

The relentless rise of renewables is taking many by surprise, says Chris Berkouwer, a portfolio manager in Robeco’s Global Stars Equities team who specializes in the sector. “Who, for example, would have thought that the state of Texas, the birthplace of America’s oil and gas industry, is by far the leading employer in wind-related jobs?” he says. 

“Texas even accounts for about one quarter of total wind power capacity in the US. In fact, with about 25 gigawatts of wind power in the state, only five countries in the world have more wind power than Texas.”

“As the technology has improved dramatically, the opportunities to deploy renewable energy technologies has increased exponentially. Wind energy only used to work in high windspeed areas, onshore, yet far away from civilization. Nowadays, turbine makers are launching floating offshore wind platforms which could substantially increase the geographic coverage of wind power generation.”

‘One of the main drivers has been an increase in storage technology’

“For example, in late 2017, 25 km off the coast of Aberdeenshire in Scotland, the first-ever floating wind farm was installed. Although its five 6 megawatt turbines only power 20,000 households in the UK, the opportunities for similar floating wind farms across the globe are plentiful.”

At the current rate of progress, BNEF projects that renewable energy will account for two-thirds of the global power system by 2050 – a threshold that could be reached in Europe by 2030. “One of the main drivers behind this dramatic increase will be the improvement in storage technology,” Berkouwer says. “This will lower costs significantly, thereby accelerating the adoption of renewable energy globally.”

“As the first terawatt of renewable energy required USD 2.3 trillion of capital spending and was accompanied by only 7 gigawatts of storage (only about 0.7% of global installed capacity), the second terawatt will come at almost half the cost and with nearly 20 gigawatts of storage, as estimated by BNEF.” 

1https://science.howstuffworks.com/environmental/green-science/world-power-consumption.htm
2http://www.xinhuanet.com/english/2018-01/27/c_136929733.htm and
https://www.weforum.org/agenda/2018/05/morocco-is-building-a-solar-farm-as-big-as-paris-in-the-sahara-desert/
3https://www.thecrownestate.co.uk/media/1050888/operationalwindreport2017_final.pdf
4https://www.edie.net/news/10/World-s-largest-wind-turbine-to-be-trialled-in-the-UK/?utm_source=dailynewsletter%2C+edie+daily+newsletter&utm_medium=email%2C+email&utm_content=news&utm_campaign=dailynewsletter%2C+8ffcc4bdf7-dailynewsletter#.WuLvEhXB6C0.twitter
5https://www.theguardian.com/environment/2017/dec/28/renewables-power-coal-2017-uk-figures and
https://www.independent.co.uk/environment/uk-no-coal-power-renewable-energy-record-electricity-climate-change-wind-solar-a8312116.htm/
6https://www.independent.co.uk/environment/solar-energy-world-investment-higher-coal-gas-nuclear-combined-2017-un-report-a8290051.html
7http://ec.europa.eu/eurostat/statistics-explained/index.php/Europe_2020_headline_indicators
8http://www.climateactionprogramme.org/news/global-jobs-in-renewable-energy-top-10-million-for-the-first-time?utm_source=ActiveCampaign&utm_medium=email&utm_content=Allianz+to+stop
+insuring+coal+industry+amid+climate+concerns+-+Climate+Action+News&utm_campaign=CA+Newsletter+8+May+2018

Robeco’s series of Stunning Statistics from the world of sustainability investing returns in October.

Read all articles
Logo

Disclaimer Robeco Switzerland Ltd.

The information contained on these pages is for marketing purposes and solely intended for Qualified Investors in accordance with the Swiss Collective Investment Schemes Act of 23 June 2006 (“CISA”) domiciled in Switzerland, Professional Clients in accordance with Annex II of the Markets in Financial Instruments Directive II (“MiFID II”) domiciled in the European Union und European Economic Area with a license to distribute / promote financial instruments in such capacity or herewith requesting respective information on products and services in their capacity as Professional Clients. 

The Funds are domiciled in Luxembourg and The Netherlands. ACOLIN Fund Services AG, postal address: Affolternstrasse 56, 8050 Zürich, acts as the Swiss representative of the Fund(s). UBS Switzerland AG, Bahnhofstrasse 45, 8001 Zurich, postal address: Europastrasse 2, P.O. Box, CH-8152 Opfikon, acts as the Swiss paying agent. The prospectus, the Key Investor Information Documents (KIIDs), the articles of association, the annual and semi-annual reports of the Fund(s) may be obtained, on simple request and free of charge, at the office of the Swiss representative ACOLIN Fund Services AG. The prospectuses are also available via the website www.robeco.ch. Some funds about which information is shown on these pages may fall outside the scope of the Swiss Collective Investment Schemes Act of 26 June 2006 (“CISA”) and therefore do not (need to) have a license from or registration with the Swiss Financial Market Supervisory Authority (FINMA). 

Some funds about which information is shown on this website may not be available in your domicile country. Please check the registration status in your respective domicile country. To view the RobecoSwitzerland Ltd. products that are registered/available in your country, please go to the respective Fund Selector, which can be found on this website and select your country of domicile. 

Neither information nor any opinion expressed on this website constitutes a solicitation, an offer or a recommendation to buy, sell or dispose of any investment, to engage in any other transaction or to provide any investment advice or service. An investment in a Robeco Switzerland Ltd. product should only be made after reading the related legal documents such as management regulations, prospectuses, annual and semi-annual reports. 

By clicking “I agree” you confirm that you/the company you represent falls under one of the above-mentioned categories of addressees and that you have read, understood and accept the terms of use for this website.

I Disagree