Page 6 - AfrElec Week 50 2020

AfrElec INVESTMENT AfrElec

Green investment forecast to return

to pre-COVID levels in 2021

GLOBAL GLOBAL capex spending on renewables is Meanwhile, global benchmark capital costs
poised to bounce back in 2021, rising 8.5% to for onshore wind and offshore wind in 2025 are
$255bn – in line with 2019 levels, IHS Markit forecast to be 20% and 15% below 2017 levels
Energy Advisory Service said this week. respectively.
Annual spending is expected to remain at Solar PV will continue to account for the
those levels until 2025, adding up to a $1.3 tril- majority of cumulative global new investment
lion cumulative 2021-2025 spend. This is 9% and gross capacity additions in 2021-2025. IHS
more than the five years from 2015 to 2019. Markit forecasts solar PV to account for approxi-
The market bounce means that capacity addi- mately 54% (nearly $700bn) of global cumulative
tions are anticipated to increase even faster, as investment in the renewables sector.
falling costs give spending rises greater bang for Global offshore wind investment will acceler-
their buck. ate swiftly during the 2021-2025 period. Cumu-
Sharply declining capital costs across renew- lative investment of $170bn is anticipated – a
able technologies mean that just a 9% increase in nearly threefold increase from cumulative 2015-
spending will be associated with a 45% expan- 2019 levels.
sion in cumulative gross renewable capacity Meanwhile, onshore wind capex is forecast to
additions in 2021-2025, compared to 2015-2019. slow, reflecting a deceleration in onshore wind
2020 saw the renewables sector hit by supply installations globally post-2021.
chain disruptions and construction delays stem- Cumulative investment in offshore wind
ming from coronavirus (COVID-19) lockdowns is expected to be $320bn for 2021-2025, down
and mobility restrictions, among other factors. from the 2015-2019 level of nearly $365bn.
IHS Markit predicts 2020 global non-hydro The overall growth in capex and capacity
renewables capex will be $235bn, down 7% from additions is anticipated to push combined global
2019 levels. wind and solar PV installed capacity beyond that
“When it comes to renewables, we may likely of global installed natural gas-fired capacity in
look back on 2020 not so much for the COV- 2023 and installed coal-fired capacity in 2024.
ID-induced contraction in spending but for In terms of global electricity generation,
the sprightly return to growth. The recovery of renewables will rise to an 18% share in 2025, up
capital investment to pre-pandemic levels, cou- from 11% in 2019.
pled with falling costs that will give added weight “There is a chance that this new surge in cap-
to every dollar invested, is bringing renewed ital spending for renewables could still exceed
momentum as we head into the New Year,” said expectations. Countries and companies are
Roger Diwan, vice president, financial services accelerating their renewables ambitions, often
at IHS Markit. anchored in net-zero emission targets, and a
IHS Markit expects the global benchmark number of key countries are likely to focus post-
capital cost for solar PV (both utility-scale and COVID crisis spending on new green initiatives.
distributed generation) in 2025 to be roughly The momentum behind these numbers defi-
40% below 2017 levels. nitely leans towards the upside,” said Diwan. ™

P6 www. NEWSBASE .com Week 50 17•December•2020