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Green Development LLC Reports Key Findings from the 2021 “Renewable Energy Market” Report

As the principal developer of large-scale renewable energy projects in Rhode Island, Green Development LLC has had front-row seats to the changes in the renewable energy market. Despite the COVID-19 pandemic, the international community has continued to make large strides towards becoming more reliant on renewable energy. Domestically and globally, a driving push from corporate tax incentives, government policies, and an overall decrease in solar energy production costs have propelled nations towards a more carbon-neutral world. In this article, Green Development LLC reviews the key findings of the 2021 Renewable Energy Market Update released by the International Energy Agency.

The International Energy Agency

The International Energy Agency (IEA) was initially established to secure oil supply during the 1973-1974 oil crisis. During that time, Saudi Arabia and other members of the Organization of Arab Petroleum Exporting Countries imposed an oil embargo on countries supporting Israel during the Yom Kippur War. Representatives from 17 countries (including the United States, which was hit particularly hard with increased oil tariffs) gathered in Paris, France, to come up with a plan to control these initial and future oil shocks.

Since its creation, the IEA has evolved into a prime authority on global energy policy—going beyond oil to include natural gas and electricity, engagement with emerging economies, and clean energy technology.

The IEA releases its major flagship publication World Energy Outlook annually, which includes in-depth projections and analyses of the global energy supply. In addition, its Renewable Energy Market Update is one of the foremost premier sources of information regarding the current state and forecast for renewable energy. As the countries included in the IEA currently represent 75% of global energy consumption, the projections provided by the Renewable Energy Market Update impact both consumers and inherently the industry as a whole.

Renewable Energy Market Update

Wind power dominated the global and domestic renewable energy capacity additions in 2020, signifying a “new normal” for renewables that are expected to account for 90% of total global power capacity increases in 2021 and 2022. Despite the COVID-19 pandemic, 2020 saw a 90% rise in global wind capacity additions, a 23% rise in solar additions, and a 45% increase in renewable capacity additions overall.

Global Trends: China Leads the Pack

China paved the way for this successful outcome, responsible for over 80% of the total global increase in renewable installations. The nation’s policy deadlines have resulted in the country emerging as the world leader in renewable energy—particularly solar and wind.

China’s decision to phase out subsidies for both wind and solar PV projects at the end of 2020 has slowed installments. However, China is still leading the pack—with Europe trailing in second place for the largest renewable power market after China. Germany is at the forefront of European installations, followed by France, the Netherlands, Spain, the United Kingdom, and Turkey.

The United States remains the world’s largest corporate power purchase agreement (PPA) market, a contractual agreement between energy buyers and sellers producing renewable energy. However, Spain’s new contracts with solar developers and Sweden’s wind power contracts have almost tripled PPA activity in Europe.

In the Association of Southeast Asian Nations (ASEAN) region, photovoltaic expansion in Vietnam made notable progress with a 60% boost from 2019 due to expiring policy deadlines. However, slow growth in Indonesia and Thailand lead to an overall 66% decline in expansion in the region.

Latin American projects that stalled in 2020 will continue moving forward in Brazil, Mexico, and Chile. Brazil, in particular, has a generous net-metering policy that, in combination with falling costs for photovoltaics, will promote photovoltaic production in the coming years. PPA market opportunities are also reaching Latin America and will likely drive future expansion efforts.

Domestic Trends: Tax Incentives Spur Wind Project Growth, While Corporate PPAs Push for Solar

Expiring tax incentives in the United States caused a rush to completion responsible for domestic growth in 2020. The production tax credit (PTC) has since been extended at 60% of the full credit for another year. Qualifying wind projects must begin construction by December 31, 2021, to receive the credit, which foreshadows faster short-term onshore wind growth.

The investment tax credit (ITC) was also extended for another year and will likely impact wind more than solar because of construction deadlines for qualifying projects. Solar photovoltaic expansion in the United States is instead projected to occur due to a growing interest in corporate PPAs, stemming from reduced manufacturing and operations costs and tax credits to generate utility-scale projects.

In an effort to halve the United States greenhouse gas emissions by 2030 and make the country’s electricity carbon neutral by 2035, new emissions reduction targets and an infrastructure plan will promote the rapid expansion of renewables in the coming years. This infrastructure plan is similar to a provision passed in 2009 that significantly increased wind deployment between 2010 and 2014. The plan reduces the need for relatively expensive tax equity and also offers developers a generous ten-year tax credit extension.

About Green Development LLC

Green Development LLC is the leading developer of large-scale renewable energy projects in Rhode Island, specializing in wind, solar, and battery storage. The company delivers significant energy savings to municipalities, quasi-public entities, nonprofits, and other qualified entities through the virtual net metering program while providing long-term lease payments to landowners and farmers.

Since 2009, Green Development has been instrumental in transforming the energy mix in Rhode Island to clean, reliable energy. The company has developed more than 70 MW in solar and wind capacity, with plans to add 75 MW in 2021. Green Development is devoted to preserving farmland, reducing water and air pollution, increasing energy security, and creating local jobs. Current wind and solar sites reduce carbon emissions equivalent to using 8,557,790 gallons of gas each year.

Sophia Masters
Sophia Masters
Sophia Masters is our politics writer, and she’s always across the latest breaking stories when it comes to often crazy world of politics. She’s skilled at filtering out the ‘boring bits’ of politics and brings her readers all the juicy detail and analysis.

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