A Global Race in 2023 For Wind And Solar Dominance - Europe, US, China Take The Lead!

This year, the world has seen an extraordinary increase in solar energy generation and a transformative shift in battery manufacturing, marking a significant turning point in the global energy sector.

 

The impressive rise in renewable energy output, largely driven by the rapid growth of solar power, represents a crucial move toward reducing reliance on fossil fuels. The accelerated adoption of renewable energy in 2023 holds the promise of combating severe global warming and its related consequences.

 

The growing affordability of clean energy has been a key factor behind this remarkable expansion, challenging conventional views on energy costs. In addition, nations across the globe have introduced policies that support renewable energy, highlighting not only the environmental advantages but also addressing the need for energy security. Despite obstacles such as rising interest rates and logistical challenges in material procurement, these factors have all contributed to the strong growth of clean energy.

 

According to the International Energy Agency (IEA), an astounding 440 gigawatts of renewable energy is expected to be added in 2023. For context, this exceeds the combined installed energy capacity of both Germany and Spain. This remarkable increase in renewable energy capacity not only illustrates a global commitment to sustainability but also signals a shift towards a cleaner, more resilient energy future.

 

According to the International Renewable Energy Agency (IREA), 2023 has marked a record-breaking year for solar installations, with China, Europe, and the United States at the forefront of this surge.

 

China, in particular, has led the global expansion, adding between 180 and 230 gigawatts, depending on the finalization of year-end projects. Europe saw a significant increase, contributing 58 gigawatts, a 40% rise compared to 2022.

 

Solar power has become the most affordable electricity source in the majority of countries. In Europe, the cost of solar panels dropped dramatically by 40 to 53% from December 2022 to November 2023, reaching unprecedented lows.

 

Michael Taylor, a senior analyst at IREA, points to the rapid pace of solar deployment in Europe, which has been a key factor in the swift expansion of solar power.

 

By the close of 2023, solar energy is expected to surpass hydropower in terms of total global capacity, although hydropower will still lead in actual electricity generation due to its ability for continuous output.

 

In the United States, California remains the leader in solar energy, followed by Texas, Florida, North Carolina, and Arizona. Federal and state incentives have played a crucial role in driving solar growth, according to Daniel Bresette, president of the Environmental and Energy Study Institute.

 

Although the solar sector has seen tremendous success in 2023, there are still challenges to address, including shortages of transformers and rising interest rates. In the US, solar manufacturing has expanded, with the Inflation Reduction Act boosting investments and over 60 solar manufacturing plants being announced in the past year, as noted by Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association.

 

As 2023 draws to a close, the global wind energy landscape reflects a record-breaking year, with enough wind power added to fuel nearly 80 million homes. While China leads the charge with over 58 gigawatts of growth, the industry faces challenges and triumphs globally.

China, advancing towards its ambitious 2030 target ahead of schedule, emerges as a growing wind market. Key markets such as Germany and India also contribute to wind energy growth, although installations in Europe experienced a 6% decline year-over-year.

 

Short-term challenges, including high inflation, rising interest rates, and increased building material costs, impact ocean wind projects, leading to contract renegotiations and delays. The nascent US offshore wind industry faces economic headwinds, with construction delays and renegotiations, yet progress is evident with the launch of the nation's first commercial-scale offshore wind farms.

 

In the United States, the land-based wind industry sees a dip in growth by year-end, but the American Clean Power anticipates a rebound with developers capitalizing on new tax credits from the Inflation Reduction Act. Despite the challenges, $383 billion in announced clean energy investments since the IRA passage signifies resilience and continued growth.

 

While 2023 is recognized as a lower-performing year, the addition of 8 to 9 gigawatts of new clean energy remains significant. The global wind buildout is slower this year, with China, the United States, and Germany leading in land-based wind, and China, the United Kingdom, and Germany dominating offshore installations.

 

Analysts predict a global industry rebound in the coming year, foreseeing a nearly 12% increase in wind energy availability worldwide. Celebrating the milestone of 1 terawatt of installed wind energy in June, the industry's rapid pace suggests reaching the second terawatt milestone in less than seven years, emphasizing its continued growth trajectory.

In 2023, the electric vehicle revolution gained unprecedented momentum, with one in five cars sold globally expected to be electric. This surge not only marked a massive year for electric vehicles but also propelled the battery industry to new heights.

 

With over $43.4 billion spent on battery manufacturing and recycling in the US, the Inflation Reduction Act played a pivotal role, putting the country on par with Europe but still trailing behind battery giant China. Large battery factories, or gigafactories, saw growth in the US and Europe, with 38 in progress for each, while China led with a staggering 295.

 

Efforts to make batteries more sustainable and explore alternatives to harmful materials gained traction. The battery recycling industry made notable progress, aligning with a broader commitment to environmental responsibility.

 

Significantly, the cost of key battery raw materials, including lithium, witnessed a substantial drop, making electric vehicles more affordable. Experts believe that this trajectory will make EVs accessible to a broader population.

 

Despite the successes, 2023 posed challenges. The US grappled with energy challenges at a major Panasonic facility, talent pool concerns at a Toyota site, and health and safety violations at a joint venture plant between General Motors Co. and LG Energy Solution in Ohio. Similar challenges echoed globally.

 

Roadblocks persist in minerals, responsible supply chains, and charging infrastructure buildout, presenting the next agenda item for the industry. However, experts remain optimistic about the continued growth of the battery industry worldwide.

"The story of batteries in the US is reflective of the global narrative in 2023, showcasing the momentous shift this year has brought," notes Daan Walter, Principal at the Rocky Mountain Institute, a sustainability research group.