Renewable energy consumption has accelerated, although not enough to replace fossil fuels. This is the diagnosis left by the IEA in its last annual diagnosis. Yes, in 2020, the capacity to be renewed is 45%, adding 280 GW to the global supply, more than the total energy of Germany. In the midst of a spectacular -historical- footprint left by the evolution of demand in the two years of the Great Pandemic. However, for some time now, and told the IEA, this indicator has already exceeded 4% in 2020, a year of social confinement and stoppage of activity due to Covid-19, an increase of 4.6% in the second part of the biennium. UNITED NATIONS dizzying jump that followed the biggest decline since World War II and that has set off all the energy alarms, since the beginning of last autumn, due to the sudden increase in gas prices, the result of various geopolitical factors – the regulation of the Russian tap to Europe – structural – high dependence on the markets of the center and north of the EU- and logistics because the bottlenecks of transport and global trade are joined by the negligible levels of inventory stock in the Old Continent.
With the electricity bill -and the fuel bill, because the gas fever has ended up infecting oil, whose barrel is already conveniently moving above three digits – through the clouds and the war in Ukraine prolonging a spiraling inflation that, until the start of the war, was conceived by the central bans -especially the ECB- As rather temporary, interest rates show an upward trend that invites us to think of electricity self-consumption as a more suitable formula to overcome the excessive bill of homes and companies.
The alternative of self-consumption, moreover, gains greater prestige if credibility is given to the opinion of analysts such as Jeff Currie, of Goldman Sachs, for whom the post-Covid business cycle has witnessed, since its first studies, an authentic “Revenge” of what he calls the Old Economy, linked to polluting fuels, which aims to slow progress towards energy neutrality. In Currie’s opinion, the escalation of electricity and the upward spiral of the IPC’s “arise from the classic problems of fossil production” that led several countries -such as China and the US and some Europeans- to reactivate coal extraction processes to content of the electric rally. Throwing more than a few smudges at sustainable government and corporate strategies and emerging green regulations.
By 2026, global electricity capacity from renewable sources will grow by more than 60%, to 4,800 GW, predicted the IEA. So yes, a month before the outbreak of the armed conflict in Ukraine. His last official prediction. With solar photovoltaics (PV) following in its wake “record breaking” -says the institution’s Outlook- in 2022, up to 162 GW, almost 50% above pre-epidemic levels; those of 2019. Evolution that surpasses that of wind energy, which has almost doubled its capacity in 2020 -after reaching a dynamism of 90%- but that will slow down its expansion in 2022 -it already did so last year-, despite the fact that it already supposes more than 50% compared to the 2017-2019 triennium. With China case monopolizing the facilities and new production centers. Eight out of ten by the end of 2020.
However, the IEA considers that the planet – governments and companies, but also capital portfolios – is not investing enough and that global energy markets now face greater risks and turmoil that may make spending on energy inappropriate. future sustainability. With the independence of the Ukrainian war. To the point that it could be delayed even more electric weather clock already urgently presented by scientists and further delay the challenge of certifying net zero CO2 emissions in 2050. Or, put another way: escaping climate catastrophe will be more difficult with rapid rebounds in fossil fuels such as those occurring nowadays.
The executive director of the IEA, faith birodoes not give rise to interpretations: “The turbulence has settled in the energy markets at a time when investments should be multiplied exponentially to guarantee the transition to decarbonisation”. While -he emphasizes- some CO2 emissions are registered again as in the time before the Covid-19 epidemic. And he directly blames these low resources in green projects for the exorbitant prices of electricity and gas since last fall and the strong existing disorder between supply and demand for energy consumption. Birol already spoke of energy contraction before the Russian invasion of Ukraine.
The war in Ukraine triggers the demand for self-consumption
In this situation, the IEA is committed to self-consumption. “Photovoltaic systems must reach the point of effective competitiveness as soon as possible”, the one that is reached when “the savings in the electricity bill (of the self-consumption part) and that of the sale -or return to the network- for the excess of electricity generation cover the costs associated with the installation, the Financing and operation of each infrastructure. Period that is being shortened by the notable competition that has been installed in the market. In family homes and industrial structures, as advanced by experts from Bloomberg NEF, its energy research division, which indicates an “unusual and almost insane” stage of installation of self-consumption solar panels as a result of the energy contraction of the second half of last year. Increased, they explain, by the outbreak of the war in Ukraine. In recent weeks, the industry and the European business fabric have been immersed in a code to save electricity bills and invest in renewable energies. In which self-consumption has invaded the roofs and spaces of residential buildings, offices and industrial buildings.
The construction of solar generation panels is relatively fast. On average, less than a year in Europe. In Stockholm, Harald Overholm, CEO at Alight AB, a firm specializing in the installation of solar farms in logistics and industrial parks, claims to have formalized contracts for the sale of electricity to companies at fixed prices with a duration of between 10 and 20 years. In addition to having increased its distribution offer by almost 500 Megawatts, more than 170 MW above the threshold of the week before the war in Ukraine. “It may have an insane component,” but competition and demand for lower prices “is spurring the alternative to photovoltaic self-consumption”. According to calculations provided by Bloomberg NEF, “solar panels among European countries are discarded 15% of the year compared to 2021.” For Overholm, “surely it does not cover the entire energy demand of a company, but in just nine months, the savings begin to be substantial”. An option that also applies to homes, “before the sudden and spectacular rise in electricity prices.” And he warns: the requests of families begin to demand that it be from today to tomorrow.
This fervor for self-consumption has also infected the big tech. Amazon or Alphabet have accelerated the formalization of massive purchase agreements for solar panels and wind turbines, waiting to obtain the relevant municipal licenses and permits for connection to the electricity grid. Although, in general, from the firms specialized in self-consumption installations in Europe, it is incident that their most relevant clients since the outbreak of war in Ukraine have been responsible for industrial companies – from cement to paper or steel, among others – to which they urge to adapt to demand a less inflationary offer than that of the free market rate.
The business of self-consumption in companies began with the last decadewhen companies close agreements to purchase electricity or assets from external renewable firms connected to the distribution network, such as those that could acquire any utility or independent electricity producer of the time, and contract the energy capacity they required based on their production ratios. In 2010, the market provided 100 MG. By 2021, private sector contracting for clean energy reached 30GW. Around 10% of the total renewable generation capacity incorporated in the last year. Or the total installation in 2008.
It does not seem either a fleeting phenomenon, or conjunctural. Procedure of 17 GW of the USA, 55% of the total electrical power of industrial self-consumption. And another 3.3 GW are connected to companies in South America. Europe signed agreements for 12GW, while Asia fell to 2GW, less than in 2020. Amazon, Microsoft and Meta Plarforms led the three largest electricity contracts in the US, most of solar origin. Amazon, from more than 6 GW, increasing its power capacity to almost 14 GW. On this scale, it can be said that it would be one of the largest players in contracted renewable energies, since its long-term portfolio is almost similar to Electricitè de France, the thirteenth company with the largest green assets in the world.
Google, which held the leadership big tech in self-consumption contracted in the USA, but one of the best in a significative way. Barely 600 MW in 2021. Although for good reason. The company has diversified its energy strategies to advance its net zero emissions among various renewable alternatives. With the corporate company of reducing its carbon footprint every hour, every day until consuming its roadmap in 2030. A proposal that goes beyond the tactics of mere outsourcing or self-consumption, but that combines both strategies and that It requires constant technological investments to meet its energy demand from the different purchase options offered by the market.
In addition to assuming a highly recommended business path from the perspective of combating climate catastrophe. Because by enjoying cost savings from renewable fixed prices, your sustainable goals are an incentive with real evolutionary calculations. Last year, 67 companies joined RE100, a global supply network of companies with a one hundred percent renewable seal, to meet the electricity demand of its partners. Currently, there are 355 signatory companies from 25 countries that, collectively, consume 363 terawatts in 2021, only slightly less than the combined demand of Illinois, North Carolina and Virginia or slightly more than that of the United Kingdom. BloombergNEF It calculates that this network results in 246 TW of its current levels in 2030, to provide the current electricity consumption of California. Or the equivalent of another 100 GW of new wind and solar contracts.
China’s solar power along with the prospects of going through in 2022 and the turning point. With market expectations of between 75 and 90 new GW connected to industrial groups and the massive installation of photovoltaic plants in desert areas of the country and for home consumption. Despite the escalation of material costs. To achieve your sustainable goals. As advised by Wang Bohua, president of the China Photovoltaic Industry Association. In the worst case, it will increase by 54.94 GW, he explains. To the heat of the massive panel installation plants in the country’s deserts. And in the midst of a fever for clean self-consumption. A roadmap promoted by President Xi Jinping himself, whose challenge incorporated between 83 and 99 GW per year of new solar capacity each year. Until registering a rebound of between 232 and 286 GW until 2025, the date on which the five-year plan approved last spring will end.