At-a-Glance
While electricity demand has faltered during the global pandemic, the share of wind and solar generation has continued to increase. Wind and solar produced 10 percent of global electricity between January and June in 2020. In the European Union, renewables accounted for 33 percent of all power generation. According to the International Energy Agency, the EU’s renewable energy production was higher than its fossil fuel generation between February and early July of this year. The increased role of renewables has highlighted the investments necessary to make the transition to a 100 percent renewable power system faster and more economically efficient. To learn more, read “Leveraging Coronavirus Stimulus to Take a Giant Leap Toward Decarbonization.”
Key Takeaways
- While there are nuances depending on local circumstances, one significant takeaway is that the power system as a whole can handle a more rapid shift to renewables than grid operators have long assumed.
- “What we found was the energy system can cope really well with much more renewable power and that it’s possible to raise the ambitions around adding more clean energy,” said Sushil Purohit, president of Wärtsilä Energy.
- Charting a more rapid and financially efficient transition to a 100 percent renewables future was a primary objective of Wärtsilä’s recent report, Aligning Stimulus With Energy Transformation, based on its Atlas modeling.
- The report demonstrates how using energy-related stimulus investments to support clean energy could speed decarbonization in five key countries: the U.S., the United Kingdom, Brazil, Germany and Australia.
- According to the report, 54 percent of the $400 billion pledged has been targeted to benefit fossil-fuel-based energy, while 36 percent has been devoted to clean energy.
- In the U.S., more than 70 percent of the current $100 billion allocated for energy stimulus was pledged to fossil fuels, compared to less than 30 percent for clean energy.
Path to 100% Perspective
Beyond the issue of decarbonization, this is a missed opportunity to spark near-term job creation. According to a report by McKinsey & Company, every $10 million of government spending on renewables creates 75 jobs, while the same amount invested in fossil fuels creates 27 jobs. For the U.S., reallocating the $72 million of the COVID-19 energy stimulus currently earmarked for fossil fuels to clean energy would result in 544,000 new jobs, 175 percent more than would be produced in the traditional energy sector. In addition, these investments would result in 107 gigawatts of new renewable energy capacity and a 6.5 percent increase in renewable electricity generation, from 17.5 percent to 24 percent.