Renewable Energy Market - Growth, Trends, COVID-19 Impact, and Forecast (2022 - 2027)

The renewable energy installed capacity is anticipated to reach approximately 4800 GW by 2027, at a CAGR of 7.63% during the forecast period (2022-2027). The COVID-19 outbreak had a significant impact on the renewable energy market. In 2020, the market witnessed low investments by governments and private players due to the global economic slowdown. According to the International Energy Agency (IEA), the investment plummeted by 10% Y-o-Y in 2020. Favorable government policies and increasing adoption of renewable energy, with the declining price of solar panels and wind turbines and their installation cost, are likely to support the renewable energy market. On the other hand, the rising adoption of alternate clean power sources, such as gas-fired power plants and nuclear energy projects, is likely to hinder the market’s growth during the forecast period.

Key Highlights

• The hydropower segment is expected to dominate the renewable energy market, with over 47.5% of the total renewable energy installed capacity in 2020.
• Technological advancements in solar PV manufacturing and solving intermittency problems using energy storage systems are likely to provide huge opportunities for the market studied.
• Asia-Pacific is expected to be the fastest-growing market during the forecast period, with the majority of the demand coming from China and India.

Key Market Trends

Hydropower Segment to Dominate the Market

• Hydroelectric power (hydropower) is a renewable energy source where electrical power is derived from the energy of water moving from higher to lower elevations. Hydropower projects also supply clean water for agriculture, homes, and business and help mitigate the impacts of extreme weather events, such as floods and drought.
• Hydropower is the single largest source of renewable electricity globally. In 2020, renewable electricity generation from hydropower achieved a record of 4,399 terawatt-hours (TWh), the largest contribution from hydropower in the global renewable-based electricity generation.
• In 2020, the global hydropower installed capacity reached 1,328 gigawatts (GW), representing a rise of 1.53% compared to 2019, down on the five-year annual average of 2.1% and well below an estimated 2.0% annual growth required to meet the Paris Agreement targets.
• According to the International Hydropower Association, to limit the global temperature rise to below 2°C above pre-industrial levels, global hydropower capacity may need to be increased by 25% by 2030 and by 60% by 2050.
• In February 2021, the International Renewable Energy Agency (IRENA) and the International Hydropower Association (IHA) collaborated to advance sustainable hydropower development. Under the terms of the partnership, the two organizations are expected to work together to accelerate the financing, development, and deployment of sustainable hydropower. The partnership is expected to involve future policy and market initiatives to benefit hydropower projects. The agency is expected to enable public-private dialogue, strengthen international cooperation, and promote sustainable hydropower through knowledge development.
• Thus, the hydropower segment is expected to dominate the market during the forecast period.

Asia-Pacific to Dominate the Market

• The Asia-Pacific region dominated the renewable energy market in recent years. It is likely to maintain its dominance during the forecast period.
• As of 2021, China is the global leader in renewable energy deployment. The country’s total renewable energy capacity reached 894 GW in 2020, representing an increase of approximately 17.9% compared to the previous year. Hydropower, solar, and wind are the major renewable energy sources in the country.
• India’s power demand increased significantly in line with its expanding economy and increasing population. In 2020, the country generated 1,560 TWh, up from 1,034 TWh in 2011. India has become the world’s third-largest power consumer, after China and the United States. Further, India’s net power generation capacity increased significantly in the last decade, most of which came from renewable energy sources, including large hydro.
• The Government of India has set a target of installing 175 GW of renewable energy capacity by FY 2022, including 100 GW from solar, 60 GW from wind, 10 GW from bio-power, and 5 GW from small hydro-power. Moreover, the Indian Ministery for New and Renewable Energy expects investment of USD 15 billion in renewable energy, electric vehicles, manufacturing of solar equipment, and green hydrogen in 2022.
• Hence, such developments will likely make Asia-Pacific the dominant player in the renewable energy market during the forecast period.

Competitive Landscape

The renewable energy market is fragmented. Some of the major players include First Solar Inc., Vestas Wind Systems AS, Canadian Solar Inc., Jinko Solar Holding Co. Ltd, and General Electric Company.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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