Renewables Market Update – May 2022 – Analysis

Renewable electricity capacity additions broke another record in 2021 and biofuel demand almost recovered to pre-Covid levels, despite continuing logistical challenges and rising prices. However, the invasion of Ukraine by the Russian Federation (hereinafter “Russia”) is causing shock waves in the energy and agricultural markets, resulting in an unprecedented global energy crisis. In many countries, governments are trying to protect consumers from higher energy prices, reduce dependence on Russian supplies, and come up with policies to accelerate the transition to clean energy technologies.

Renewable energies have great potential to reduce prices and dependence on fossil fuels in the short and long term. Although the costs of new solar PV and wind installations have risen, reversing a decade-long cost-cutting trend, natural gas, oil, and coal prices have risen much faster, thus actually improving. further the competitiveness of renewable electricity. However, how quickly renewable energy can replace fossil fuels depends on several uncertainties and will depend on many factors. Will renewable electricity sources defy this global energy crisis and continue to expand rapidly despite emerging political and macroeconomic challenges? At the same time, growth in biofuel demand faces significant obstacles both from slower growth in transportation demand and from high biofuel prices. Will demand growth resume at historical rates?

By exploring the most recent policy and market developments through April 2022, our Renewable Energy Market Update forecasts new global renewable energy capacity additions and biofuel demand for 2022 and 2023. It also discusses key uncertainties and policy-related implications that may affect projections to 2023 and beyond.

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