BAKU, Azerbaijan, November 1. Renewables, which include wind, solar, as well as geothermal, are set to remain the fastest and largest growing source of energy demand in the medium- and long-term, Trend reports via the latest World Oil Outlook (WOO) from OPEC.
According to the report, these renewables are projected to grow from 7.4 million barrels of oil equivalent per day (mboe/d) in 2021 to above 38 mboe/d in 2045, which indicates an average annual growth rate of 7.1 percent.
The report said the growth of the mentioned renewables is only slightly lower relative to the combined demand growth of oil and gas between 2021 and 2045.
OPEC said wind, solar, geothermal energy sources are supported by energy policies and commitments to reduce the carbon footprint of energy systems, as well as its rising competitiveness relative to other fuels. Yet, their market share is estimated at just below 11 percent in 2045, up from 2.6 percent in 2021.
As WOO said, amid the upward trend for global investment in renewables in 2020-2021 with record high capacity additions, the cost competitiveness of renewables, especially solar and wind, has significantly improved.
"However, rising energy and commodity prices, combined with supply chain issues, added to the cost of renewables for the first time in a decade. Moreover, capital expenditures have also increased, resulting in even higher investment costs," said the report.
“It is also assumed that the overall system costs of renewables will start increasing in line with the rising share of intermittent power in the generation mix, due to the increasing need for balancing and storage,” OPEC noted, adding that, at the same time, this could be partially offset by further technological progress and economies of scale in the medium and long term.
Meanwhile, according to the data from OPEC, about 130 GW of solar capacity was installed in 2021, with China alone adding more than 52 GW. At the same time, Europe added about 22 GW, and capacity in North America increased by 20 GW. A similar picture can be observed in the wind sector. The total installed wind capacity in 2021 was about 92 GW, of which 47 GW was added in China. Other major additions were observed in Europe and the US.
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