Global Renewables Pipeline: Watts Changed

Watts Changed Australia: New renewable projects

In November and December 2020, 50 new assets owned by 37 companies were added to the RenewableCube, pushing Australia’s project pipeline for the full year above 2019’s level. The projects added to the pipeline in the last two months of last year brought an additional 1.73 gigawatts (GW_AC) of wind energy capacity, 1.45 GW_AC of lithium ion batteries, 1.33 GW_AC of hydrogen electrolysers, 0.96 GW_AC of solar PV and 0.4 GW_AC of pumped hydro. As a result, 2020 was another record year for newly proposed utility solar, wind, storage and hydrogen projects in Australia, with the additions boosting the country’s total renewable capacity to 225 GW_AC from 1048 assets. In total, 21 GW_AC of utility wind, 17.4 GW_AC of utility solar and 19.2 GW_AC of storage/ hydrogen electrolyser assets were added to the RenewableCube during the 12-month period. Last year’s total of newly proposed assets (57. 6 GW_AC) surpassed 2019 (55.3 GW_AC) and represented more than double the capacity added in 2018 (27.5 GW_AC).

US renewable energy project pipeline surged in 4th quarter 2020

The US renewable energy market continued to make positive strides in the fourth quarter of 2020, according to the latest data from the Energy Information Administration (EIA), as around 5.3 gigawatts (GW) of new development projects were announced in October and nearly 700 megawatts (MW) of new utility solar and wind generating capacity came online. Furthermore, the renewables sector is poised to carry added momentum into 2021 after Congress in December extended federal tax incentives that are pivotal in underpinning the growth of clean energy.

As part of a Covid-19 relief package bill, Congress extended the Production Tax Credits (PTC) and Investment Tax Credits (ITC) by one and two years, respectively. As a result, wind projects that begin construction by the end of 2021 can now qualify for the PTC at 60% of the full rate, or at $15 per megawatt hour (MWh), and will be required to be operational by the end of 2025. Meanwhile, utility scale solar plants that commence construction before the end of 2022 will retain the rate of 26% credit on expenditure, falling to 22% in 2023, and then to 10% in 2024 for larger scale projects, while expiring for small scale solar plants. After 2024, the 10% rate is expected to apply for large projects.

These measures will undoubtedly provide more relief for projects hit by delays caused by the Covid-19 pandemic, while also helping to maintain the growth trajectory of renewable energy in the next five years.

India awards over 26 GW of solar projects in 2020 

India awarded over 26 gigawatts (GW) of new solar projects in 2020 auctions. Despite the pandemic, the country launched many major auctions to meet surging energy demand, and the market response was more than encouraging. Auctions in 2020 got progressively more competitive, and a new record-low $27.18 per megawatt-hour (MWh) tariff was recorded in the latest auction held by Gujarat Urja Vikas Nigam Limited (GUVNL) in December 2020. The low tariffs reaffirm that solar power is now cheaper than coal power in India. Solar in 2020 also thrived thanks to India’s must-run status for renewables, which guarantees solar power isn’t curtailed except in certain situations when grid stability is at risk. Despite the success of 2020 solar auctions, the continuation of the solar surge faces multiple obstacles: the impact of the pandemic, the renegotiation of contracts, limitations on grid infrastructure and land acquisition, and inconsistent state policies will all make the country’s goal of 100 GW of installed solar capacity by 2022 a challenge.  

Uzbekistan and Afghanistan to drive growth of renewable energy in Central Asia

Central Asia is on its way to boost installed solar and wind capacity to 12 gigawatts (GW) by 2025 from 1.4 GW at the end of 2020, driven by Uzbekistan and Afghanistan. Most of this capacity is the result of tenders and auctions across the region, which have received strong interest from international developers, mainly from the Middle East, China and Europe.

Highlights from Renewable Energy Trends Report January 2021

Utility solar PV PPA prices fell from $72/MWh in 2019 to $54/MWh (-26%) in 2020

Utility wind PPA prices slid from $41/MWh in 2019 to $38/MWh (-8%) in 2020

Global auctions saw the award of 50.7 GWAC from 88 rounds across 21 countries in 2020, with. 4.7 GWAC awarded in December from 11 auction rounds

M&A activity saw a total of 97.5 GW worth of solar, wind and storage capacity transactions, a 60% increase compared to 2019

Projects under construction reached a collective capacity of 219 GW by year end, with Asia topping the list at 110 GW of capacity, followed by North America (58 GW) and Europe (29 GW)