Renewable Energy Outlook

Most countries racing toward increased

renewable power generation

MarketLine Case Study

Report Code: MLCS0001-063

Published: October 2020
Renewable Energy Outlook: Most countries racing towards increased renewable power generation
Published: October 2020 Case Studies

1. Overview

1.1. Catalyst
To improve energy security, reduce CO2 emissions and attain corporate sustainability goals, the global power sector has
witnessed a shift in capacity additions from conventional power sources to renewable sources. With a focus on decarbonizing
electricity supply, several governments and utilities are focusing on increasing the share of renewables in the overall energy
mix. They have provided support measures that include incentives for renewable power development and to offer a level
playing field against conventional sources.

1.2. Summary
The changing geopolitical situation in the oil and gas supply markets in the Middle East is also expected to lead the demand
for renewable energy across the globe. Over the past decade, the growth of renewable power has gained momentum in
many countries. With the industry maturing and costs falling significantly to make renewable power economically viable with
little or no subsidies, we expect renewable energy adoption to continue its upward trend. In 2019, generators in several
countries included large renewable power capacities for the first time. In 2020, more countries are expected to enter the
league of large scale renewable power installations.

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Renewable Energy Outlook: Most countries racing towards increased renewable power generation
Published: October 2020 Case Studies

Table of Contents
1. OVERVIEW 1

1.1. Catalyst 1

1.2. Summary 1

2. MAJOR TRENDS IN THE RENEWABLE ENERGY SECTOR 1

2.1. Repowering of old wind farms and consolidation in manufacturing 1

2.2. Advanced wind farm O&M practices and techniques 1

2.3. Battery storage integration is becoming more and more common and hydrogen tech is being
developed 2

2.4. Use of data and technology such as AI is increasing 2

3. RENEWABLE POWER SHARE OF THE ENERGY MIX IS INCREASING EVERY YEAR 3

3.1. Wind Solar and Hydropower capacity have grown dramatically 3

3.2. Reduced technology prices are helping to increase adoption 4

3.3. Role of technology in scaling up renewable energy 4

4. IMPACT OF COVID-I9 ON RENEWABLE ENERGY SECTOR 5

4.1. Demand side disruption 5

4.2. European border restrictions 5

4.3. Macroeconomic environment 5

4.4. PPAs turning more expensive 5

4.5. China’s solar PV supply chain 6

4.6. COVID-19 impacting global solar PV supply chain as well 6

4.7. China’s Solar PV Market 6

5. APPENDIX 8

5.1. Further reading 8

6. ASK THE ANALYST 8

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Renewable Energy Outlook: Most countries racing towards increased renewable power generation
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7. ABOUT MARKETLINE 8

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Renewable Energy Outlook: Most countries racing towards increased renewable power generation
Published: October 2020 Case Studies

List of Figures

Figure 1: Renewable Power Global Cumulative Capacity, 2010–2030 3

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Renewable Energy Outlook: Most countries racing towards increased renewable power generation
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List of Tables
No table of figures entries found.

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Renewable Energy Outlook: Most countries racing towards increased renewable power generation
Published: October 2020 Case Studies

2. Major trends in the renewable energy sector

Trends in the renewable energy sector include a great deal of windfarm progression including increased capacity and
consolidation of manufacturers. Battery storage is becoming more and more significant and renewable suppliers are
adopting it. Further technologies are being developed to better manage renewable energy solutions too, through AI and
machine learning.

2.1. Repowering of old wind farms and consolidation in

manufacturing
Wind Repowering is defined as replacing older wind turbines with new wind turbines before the end of the old turbines’
lifetime. The new turbines are much more efficient and more powerful; they use the wind in an optimal manner and can
provide high yields with better capacity factors. Repowering of old wind farms has been quite popular over the past few
years. In the US in particular, several independent power producers (IPPs) rushed to repower their aging wind farms in order
to be eligible for the Production Tax Credit (PTC).
Since 2017, there has been a lot of consolidation in the wind power industry, especially among the original equipment
manufacturers (OEMs). A significant example of this was the merger of Siemens and Gamesa to form a single company –
Siemens Gamesa. This was preceded by GE’s acquisition of Alstom’s wind turbine business and Nordex’s acquisition of
Acciona’s wind turbine business. European manufacturers have been expanding into markets that have traditionally been
dominated by local players. Where necessary they have been forming joint ventures with the local players either for
compliance or for synergy in that particular market. This trend of consolidation continued till 2019 and was expected to
continue into 2020 as well. However, the COVID-19 pandemic has put the brakes on M&A activity on the Power sector,
including renewables.
Higher wind turbine towers and longer blades increase capacity and electricity generated per turbine. Costs also decrease on
a per MW basis. With increasing technological competence, larger turbines are being manufactured and more developers are
opting to install these lager turbines to make full use of their sites’ wind power potential. Offshore wind has been particularly
growing in terms of turbine capacity, hub height, and rotor diameter. GE has recently built the world’s longest wind turbine
blade – Halidade-X 12 MW offshore turbine – featuring a 107-meter blade and 220-meter rotor. This offshore turbine stands
260-meters tall. The longer a rotor blade is, the more wind a turbine can harness and convert to electricity. The production of
longer blades involves advanced structural designs and the use of complex composite materials. With advancing
manufacturing technologies and better transport in several parts of the world, longer blades are being sought to
complement the turbines of taller towers.

2.2. Advanced wind farm O&M practices and techniques

New technological advancements are being seen in the O&M activities of wind farms. Drones with HD cameras and thermal
cameras are now solving a number of issues that wind equipment managers faced for years. It is normally time-consuming
for staff technicians to separately climb and check each wind turbine tower. Drones have solved this problem by providing
high-definition images and video footage of each wind turbine from the air to inspect damages and thermal imaging to
detect any internal abnormalities.
Predictive Maintenance helps in decreasing wind O&M cost. Predictive maintenance processes have become a common
practice in the wind O&M market in the recent years. Predictive maintenance programs aid the O&M service providers to
arrange for ordering parts and schedule work and refurbishment activities, based on condition assessment. It also reduces
the need for a technical crew member to make frequent plant visits as minor repair work or issues are handled remotely. The

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Renewable Energy Outlook: Most countries racing towards increased renewable power generation
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process includes predictive models for visual inspection, confirmation of damage, coming up with an action plan, and
assessing how long equipment can operate. In a fleet of wind turbines, predictive models work in conjunction with Condition
Monitoring System (CMS) to give the longest lead time for identifying faults.
Offshore wind power is going through a phase of transformative improvement. To tap higher wind speeds, developers
installing much larger turbines farther into the sea in deeper waters. Turbines that can handle faster winds, is unrestrained
by the depth of water, and involves a support structure that can accommodate the increasing wind turbine size is the Holy
Grail being sought after. Seabed-mounted offshore wind turbines provide a successful design, but they are confined to
shallow waters. Floating offshore wind turbines are now gaining momentum and will be the future of offshore wind. These
turbines can be utilized at a water depth of 50 meters (m) or more.

2.3. Battery storage integration is becoming more and more

common and hydrogen tech is being developed
Integration of battery energy storage: The rising share of renewable energy sources has necessitated the need for adoption
of battery energy storage systems (BESS) technology. Intermittent renewable energy sources such as wind and solar power
with significant peaks and troughs require energy storage for smooth output of the irregular generation and to reduce ramp
rates for medium and large power plants.
Hydrogen has the ability to assist in variable power output from renewable energy sources such as solar PV and wind. The
availability of these sources is not always commensurate with demand for power. Hydrogen serves as one of the leading
alternatives for energy storage from renewables and seems to be favored as a lowest-cost alternative for storing huge
quantities of electricity over days, week and also months. The storage of hydrogen fuel can take place for long periods, and in
quantities limited only by the size of storage facilities. Hydrogen energy storage showcased its benefits beyond the lab via
real-world projects. In 2018, Enbridge Gas Distribution and Fuel Cell and Hydrogen Energy Association (FCHEA) member
Hydrogenics began operations of North America's first multi-MW power-to-gas (P2G) facility - 2.5 MW Markham energy
storage facility in Ontario, Canada - that uses renewably-sourced hydrogen. The facility is currently offering grid regulation
services bound by contract to the Independent Electricity System Operator (IESO) of Ontario. In the US, the Southern
California Gas Company (SoCalGas), a natural gas provider to Southern California, has been involved in partnerships in
hydrogen energy storage projects. The company is a leader in getting power to gas (P2G) technology into the US. With the
National Fuel Cell Research Center (NFCRC) at the University of California at Irvine (UCI), SoCalGas set in place an electrolyser
powered by the on-campus solar electric system that feeds renewable hydrogen into the campus power plant.

2.4. Use of data and technology such as AI is increasing

Modern technologies such as AI and machine learning (ML), and blockchain are being adopted by the power industry
especially by utilities and power system companies. AI is being used to harness the wealth of data generated by utilities and
consumers and derive insights about generation and consumption, and better manage supply and demand. AI and ML have
an important role to play in improving demand predictions, generation predictions from non-dispatchable resources like
wind and solar and wholesale price predictions. They can also play an important role in understanding how changes to one
part of the system would affect the system as a whole, reducing the impact of outages and disconnections. Blockchain is
being used by utilities to create and maintain peer-to-peer electricity trading platforms. Blockchain plays a key role when
companies have shared infrastructure. Electron, in a collaboration with French energy giant EDF, has brought peerto-peer
electricity transactions to a block of flats in London that has solar panels, owned by the landlord, installed on the roof.

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Renewable Energy Outlook: Most countries racing towards increased renewable power generation
Published: October 2020 Case Studies

3. Renewable power share of the energy mix is

increasing every year
15 years ago, hydropower, biomass, and biogas were the dominant renewable technologies. However, since then, wind and
solar have dominated and will remain the leading renewable power sources in the foreseeable future. Except for small
hydropower, the growth of all the other renewable technologies is expected to be significant, but wind and solar are
expected to make the largest contribution to the total installed renewable energy capacity.

3.1. Wind Solar and Hydropower capacity have grown dramatically

Cumulative installed wind power capacity increased from 198 GW in 2010 to 650.2 GW in 2019 at a compound annual
growth rate (CAGR) of 14.1%, while the cumulative installed solar power capacity increased from 38.5 GW in 2010 to 596.8
GW in 2019 at a CAGR of 35.6%. The figure below shows cumulative installed capacities of the major renewable power
technologies for the period 2010–2030.

Figure 1: Renewable Power Global Cumulative Capacity, 2010–2030

© MarketLine
Source: Global Data

The total global installed capacity of renewable energy (including hydropower) was 1,346.7 GW in 2010, with a 26.1% share
of total capacity. It grew more than 2 times to 2,725.7 GW in 2019 with a 36.5% share of capacity. In 2019, hydropower
accounted for 48.1% of global renewable power capacity followed by wind (23.9), solar PV (21.9%) and biopower (5.3%).
Geothermal and solar thermal power had negligible capacity shares. The figure below shows the cumulative installed
renewable capacity share by source in 2010, 2019, and 2030. The figure graphically depicts solar PV’s growth in share

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Renewable Energy Outlook: Most countries racing towards increased renewable power generation
Published: October 2020 Case Studies

between 2010–2019. This trend will continue and by 2030 solar PV will overtake wind to be the dominant renewable source
and contribute to 34.5% of the total renewable power capacity.

3.2. Reduced technology prices are helping to increase adoption

Renewable electricity has been expensive compared to conventional electricity, making it dependent on incentives and
subsidies. Following technological advances, wind and solar are becoming economically competitive. Onshore wind
technology has evolved into an established and mature technology with a low cost of generation. Renewable projects are
now starting to compete with conventional power, proving they can replace conventional power in many countries. Grid
parity refers to a point at which the leveled cost of power generation from a technology is equal to or less than the price at
which the power is sold from the grid to the customers. A few European countries such as Spain, Germany and Italy have
already attained commercial solar grid parity. In addition, new solar and onshore wind power technology have attained grid
parity with average wholesale market prices in few parts of Europe, China, and in the US state of California. The following
chart shows how the cost of installing solar PV and wind power plants has reduced during 2010– 2020.

3.3. Role of technology in scaling up renewable energy

New technologies will play a big role in the renewables sector. There are several aspects of a renewable power plant where
big data analytics can be used, including process optimization, predictive maintenance, and programmed drones for O&M
activities. Right from pre-feasibility studies data analytics is being used to study and assess wind sites and solar farms to
locate potential sites with greater accuracy. Other technologies such as blockchain are being trialed to improve the trading of
renewable energy set up by residential and commercial consumers. One of UK’s largest utility companies, National Grid, is
using Open Energi’s Direct Demand technology platform to stabilize supply and demand across the UK’s power grid. In short,
evolution of big data and IoT is facilitating utilities to enhance their customer relationship, determine outages/leakages and
detect faults by analyzing the vast amount of data coming from diverse IoT-embedded sensors and smart meters.

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Renewable Energy Outlook: Most countries racing towards increased renewable power generation
Published: October 2020 Case Studies

4. Impact of COVID-I9 on renewable energy sector

Until recently, the global renewable energy sector achieved considerable growth, supported by a combination of government
policies, falling costs, enhanced efficiencies along the supply chain, along with economies of scale. According to International
Renewable Energy Agency (IRENA), renewables accounted for 72% of all new power generation capacities built in 2019,
putting the global power sector on a path towards sustainability, while tackling the issue of climate change. The maturing
market, perceived low risk, and improved economic attractiveness have facilitated substantial investments and accelerated
the adoption of renewables. Moreover, intense competition between manufacturers and developers, auction dynamics, and
technology advancements have bolstered the competitiveness of projects and enabled wider proliferation of renewables.

4.1. Demand side disruption

COVID-19 lockdowns have significantly disrupted the demand side of the renewable energy supply chain. Although China and
European countries have slowly resumed operations and eased lockdown restrictions, the impact of the global economic
slowdown will dent the renewables market. Reduced demand increases uncertainty to project finance, impacts development
timelines, and stunts growth. COVID-19 related supply disruptions, due to plant closures and shortage of components, have
pushed up equipment prices.

4.2. European border restrictions

COVID-19 lockdowns have shut borders and increased uncertainty on policy support and the broader economy. In Europe,
countries such as Ireland, Portugal, and the UK have postponed auctions, with Germany and France providing extensions for
developers to ensure projects are not negatively impacted. With Europe significantly impacted, and now easing its lockdown
restrictions, border reopening by member states is still bound by its own set of timetable and rules, which could impact the
deployment of renewables well into the second half of this year. Companies will find it difficult to operate where consumer
demand is suppressed. For example, rooftop solar PV installations will be hit, over transmission risk concerns. Moreover, the
permitting and commissioning process have been halted, which will further slow demand for equipment.

4.3. Macroeconomic environment

A number of smaller developers will find it difficult to remain solvent given the current macroeconomic conditions. Larger
developers could move towards protecting their balance sheets and improving their revenue streams rather than opting for
new investments in renewables. New investments into renewables requires significant upfront capital. While government-
backed stimulus packages will most likely include money for the energy industry, governments are now more keen on the
post COVID-19 industry scenario and this is their core agenda. Without immediate policy support for renewables and with
the existing market risks, new capacity additions are likely to slow down in the short term.

4.4. PPAs turning more expensive

PPAs have been integral in supporting the deployment of renewable energy without government subsidies and for
corporations to attain their sustainability goals. Project developers are reliant on cash flows from PPAs, which in certain cases
could represent their entire revenue stream and act as collateral for loans to support future projects. Reduced industrial
activity due to lockdowns has resulted in decreased commercial and industrial power consumption, which affects existing
PPAs. With corporations witnessing a drop in credit ratings, developers could find it difficult to secure loans for potential

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Renewable Energy Outlook: Most countries racing towards increased renewable power generation
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projects, as a higher credit rating corresponds to better financial stability. This drop in credit rating is making PPAs more
expensive. In the current economic climate, banks are likely to be wary to lend during a period of significant volatility, which
would severely affect mid stage renewable power projects that have secured planning permissions and are seeking financing.

4.5. China’s solar PV supply chain

To emerge more resilient than before, governments will focus on providing short term stimulus for immediate commercial
recovery, such as in the US, so as to support clean energy commitments and combat climate change. COVID-19 has altered
market dynamics for renewables, impacting all stakeholders along the value chain. On the supply side, the emergence of the
coronavirus in China had supply chain ramifications, as the country is home to prominent renewable equipment
manufacturers. The country has proved itself leader when it comes to wind power installation; wind turbine manufacturing
and solar photovoltaic (PV) manufacturing. Taking the solar modules market as an example, China exerts significant control
over the entire fabrication chain, with manufacturers in other countries such as Malaysia, Vietnam, and South Korea, reliant
on raw materials supplied by China. With plants in China halting operations at the end of January, the market experienced
material and equipment shortages, contributing to shipment delays and price rise. On the demand side, solar developers
were facing prospects of delayed deliveries, penalties, and rising costs that consequently impact their profit margins and
credibility. The disruption in supply placed projects in the development pipeline under risk.

4.6. COVID-19 impacting global solar PV supply chain as well

The coronavirus outbreak will affect the overall supply chain and solar installations not only in China but globally, majorly the
US and other countries such as India and Australia, heavily dependent on Chinese raw materials and components. Many solar
manufacturing plants which are located outside of China are dependent on Chinese imports for raw materials such as
aluminum framing and solar PV glass. India’s solar sector has a high import dependency. China, Malaysia, and Vietnam are
the top countries for imports for solar power equipment, but most of the imports come from China. Shortcomings in the
Chinese manufacturing sector have trickled down into the Indian market, creating uncertain times for project developers.
Nearly 3 GW of projects are at risk of penalties for missing deadlines, which could further add to the developers’ financial
strain. The US, with more than 75 GW installed as of 2019, is heavily dependent on solar PV panel production from China.
The country is already facing supply bottleneck since the extension in PTC and ITC granted in December 2019. The Q1
production delays due to extended Chinese New Year Holidays as a result of the coronavirus outbreak will worsen the
situation for the US developers who will be forced to look out for alternate sourcing avenues.

4.7. China’s Solar PV Market

China is a leader in terms of solar PV installations as well as production of solar PV panels. China has the largest installed
solar power capacity of more than 205 GW contributing more than 35% of the global Installations. China’s annual installation
was expected to be around 30 GW in 2020 however, the outbreak is likely to impact solar installations during the year.
Globally, China has the biggest solar PV equipment manufacturing capacity. The solar sector is expected to face the heat,
given the tight capacity in solar equipment manufacturing. Majority of the top 10 solar PV manufacturers (in terms of module
shipments) are China based. These include Jinko Solar, JA Solar, Trina Solar, LONGi Solar, Risen Energy, GCL System and
Suntech. Coronavirus-hit province Zhejiang is home to few of JinkoSolar’s manufacturing works, the largest Solar Module
Super League (SMSL), while JA Solar is also involved in manufacturing operations in this province. Post the COVID outbreak,
the Jiangsu province in China took the hardest hit in terms of solar PV production capacity, as more than 60% of the country’s
solar PV panels are made here, as per the Gofa institute – a part of the Chinese government’s National Energy Administration
(NEA). The key manufacturing hubs in the Jiangsu province include Canadian Solar, LONGi Group, Trina Solar, Q-CELLS and JA
Solar. Due to this outbreak, the solar power market has concerns with regards to material supply shortage as well as logistical
restrictions due to closed borders, which could increase the price of solar modules, that otherwise was plunging rapidly. The

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Renewable Energy Outlook: Most countries racing towards increased renewable power generation
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shortage will delay equipment deliveries and affect the solar sector’s global supply chain. Solar PV manufacturers such as
Trina Solar have alerted about production delays and LONGi Green has commented that there is no significant outcome on
its solar PV panel sales and production, and its shipment targets will also not witness any change for this year.

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Renewable Energy Outlook: Most countries racing towards increased renewable power generation
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5. Appendix

5.1. Further reading

Power Generation (2020) MarketLine Industry Profile
Power Generation: Four key areas shaping the future of energy production (2018) MarketLine Theme Report

6. Ask the analyst

We hope that the data and analysis in this case study will help you make informed and imaginative business decisions. If you
have any questions or further requirements, MarketLine's research team may be able to help you. The MarketLine Research
team can be contacted at ReachUs@MarketLine.com.

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