Renewables continue to break records despite COVID-19 impacts

Even as the global economy has been locked down by the COVID-19 pandemic, May 2020 saw the renewable energy and storage sectors continue to achieve new record-breaking milestones. Stranded asset risks for the coal-fired power sector continue to grow as a result, sending global capital fleeing for the exits.

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In May 2020:

• A global record-low solar tariff of just US$13.50 per megawatt hour (MWh) was awarded in Abu Dhabi. This was 13% below the previous record low set in January 2020 in Qatar at US$15.60/MWh.
• The New Mexico Public Regulation Commission (NMPRC) approved a 100MW of solar generation and 50MW of dispatchable battery storage for about US$30/MWh.
• California awarded seven projects totalling 770MW of battery storage.
• Siemens Gamesa announced its proposed launch of a new record 14MW offshore wind turbine, for commercial deployment in 2024.
• In Australia, the Queensland government’s CleanCo awarded a 400MW solar contract to Neoen.
• Two mega-renewable hydrogen projects were reported in China. GD Power Development Co. plans to build a US$2bn project with up to 2GW of renewables capacity in northern Inner Mongolia. Utility Beijing Jingneng Power Co. plans a US$3bn project with capacity of 5GW.
• Six new or tightened coal exit policies were announced by globally significant financial institutions, taking the 2020 to-date tally to 37 announcements.
• BlackRock completed its thermal coal miner divestment in May 2020 and put KEPCO on notice over the Korean utility’s plans to continue investing in new coal-power plants.
• The European Union announced a record green recovery stimulus in May 2020, including €91bn a year for home energy efficiency and green heating, €25bn of renewable energy, €20bn for clean cars over two years, plus €60bn for zeroemissions trains. Corporate and financial sector momentum for decarbonisation is building globally.

The hype of hydrogen continues to build, with a record number of ever-larger renewable hydrogen electrolyser projects being announced. A decade ago, most projects were smaller than 0.2MW. Over the last three years, several projects were in the range of 1-5MW, with the largest at 6MW. This year has seen a 10MW project commissioned in Japan, while a 20MW project has commenced construction in Canada. Press reports suggest China is developing projects that will dwarf these installations.

With a 20% year-on-year decline in solar module costs to just US$0.17-0.20/watt, and collapsing global interest rates, there is no sign that solar deflation will slow anytime soon. And with China announcing a record number of solar manufacturing capacity expansions, economies of scale continue to combine with technology improvements to drive this trend.

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