Governors' Wind Energy Coalition

Rapidly rising investment in renewable energy has allowed for a “decoupling” of economic growth from greenhouse gas emissions across much of the world, but the future will continue to be shaped by dynamic and sometimes volatile energy markets, according to findings released yesterday by the World Energy Council.

In its latest resources report issued yesterday, the council said the past 15 years have witnessed “unprecedented change in the consumption of energy resources worldwide,” and that “most countries have achieved a more diversified energy mix” thanks to steeply falling costs for nontraditional energy fuels and technologies, including renewables.

While fossil fuels will continue to be dominant in the first half of the 21st century, year-over-year expansions of wind and solar power, combined with new and existing hydropower, biomass and waste-to-energy generation, and advances in energy storage will alter the energy trajectories of many countries, the analysis found.

“We have seen a dramatic increase of unconventional resources and no less dramatic technology improvement in the renewables space over the past decade,” Christoph Frei, the council’s secretary general, said in a statement released with the 2016 World Energy Resources report.

Data show that renewable energy almost doubled globally in one decade, from 1,037 gigawatts of capacity in 2006 to nearly 1,985 GW at the end of 2015. Wind energy grew nearly sixfold, from 74 to 432 GW during that period, while solar capacity exploded from 6 to 227 GW.

Hydropower, which accounted for 71 percent of all renewable energy produced globally in 2015, also saw a 35 percent expansion, from 893 GW in 2006 to 1,209 GW last year, according to the report.

“Renewables such as solar, wind and hydropower now account for about 30 percent of the total installed power generating capacity and 23 percent of total global electricity production and will continue to grow,” the report said.

Yet, despite the profound transition within the global energy sector, the report notes that some energy resources will continue to face deployment challenges, and the rate of adoption to clean energy is far slower than required to meet emission targets, the analysis warned, a challenge attributable to both political and economic forces.

“Public acceptance [for energy projects] remains a challenge, regardless of the energy source, with an increased ‘not in my backyard’ attitude to the development of energy sources,” the analysis found. WEC also noted that “more progress is urgently needed” to scale up energy efficiency, electric storage, and carbon capture and storage (CCS) technologies.

Experts also cautioned that while government incentives, such as feed-in tariffs and tax credits, have created a boom for renewable energy in certain regions and countries, some companies may struggle or even fail as their technologies mature and governments scale back public supports.

At the same time, the authors noted that continued uncertainty around commodity prices will drive up risk for investors, and that large investments with long lead times, such as oil and gas, will become less appealing. Also, technologies that rely on rare earth minerals, such as batteries, could see future barriers to growth if global supply chains for rare earths are disrupted for political or economic reasons.

Hans-Wilhelm Schiffer, executive chairman of World Energy Resources, said the prospect of a more diversified global energy mix “creates many opportunities, but the enlarged complexity also leads to increased challenges” that will make strategic decisionmaking even more important for stakeholders, governments, international organizations and private companies.