John Rieger (00:00):
Welcome to InAsia. I'm John Rieger.
Tracie Yang (00:02):
And I'm Tracie Yang.
John Rieger (00:03):
Some of the most indelible images of the pandemic have been the brilliant skies that replaced toxic smog as the world stayed home and fossil fuel use plunged.
Tracie Yang (00:13):
Now as nations start fitfully opening up, are we destined to go back or is renewable energy finally ready to take us in a new direction? At stake of course is not just the color of the sky, but the fate of our rapidly warming planet.
John Rieger (00:27):
Here with us now to talk about the global prospects for renewable energy at this singular moment is Anindya Upadhyay, an energy analyst for The Asia Foundation who joins us via the intertubes from New Delhi. Hi Anindya.
Anindya Upadhyay (00:40):
Hi John, hi Tracie. I'm glad to be here. Thank you for inviting me for this interview.
John Rieger (00:46):
Welcome to the podcast. Where do renewables stand in the world's energy mix today and what are their prospects?
Anindya Upadhyay (00:52):
So a third of the world's installed power capacity was renewable energy in 2019 according to the International Renewable Energy Agency. And according to more research by Bloomberg New Energy Finance, wind and solar will almost supply 50% of world's electricity by 2050 ending the era of fossil fuel dominance in the power sector. So I would just like to say, you can't stop an idea whose time has come. It's a tectonic shift in how energy is being and will be produced in the world.
John Rieger (01:26):
Let me just repeat that. One third of the world's installed power capacity was renewable in 2019. I can remember a time when it was audacious just to put in solar hot water.
Anindya Upadhyay (01:37):
Right. And now that has turned into large utility scale projects. And now we also have storage solutions to support renewable energy. We also have electric vehicles that are using storage and some of them are being also charged by renewable energy. So it's a whole new world from when use of solar water heaters and it's for the good.
Tracie Yang (01:58):
So now how has the pandemic impacted green energy investment?
Anindya Upadhyay (02:03):
So the pandemic has depressed electricity demand by 20% or more during periods of lockdown in several countries. And this has impacted global coal demand the most that has fallen by almost 8% compared with the first quarter of last year according to the International Energy Agency. Now, one of the reasons explaining this drop is that cheap gas and continued growth in renewables elsewhere has challenged coal, and renewables are the only source that has posted a growth in demand driven by larger installed capacity and priority dispatch.
Anindya Upadhyay (02:39):
So as far as I think, renewable energy investment is going to continue to grow, not only because it's a good idea, but it also fits economies. Renewable energy prices have dropped dramatically in the last 10 years, and in many parts of the world, in most parts of the world, I'd say, they've become far, far cheaper than coal-fired energy. It's cheaper than coal and it's also faster to install.
John Rieger (03:08):
Does cheap oil have a place in this equation? Oil prices have fallen spectacularly during the pandemic.
Anindya Upadhyay (03:14):
That's right. A lot of people are saying that there could be a push for inefficient vehicles and more oil use because of cheap oil. But the thing is that the world has also realized that oil causes more global uncertainty. It causes spats between countries, it has a fallout on international relations, and it also makes for a very volatile investment case. The shocks are not easy to deal for every country. Therefore, there is a lot of thinking about seizing this moment to cut oil use from the transport sector. If at this moment there could be more public transport and policies that push for adopting electric vehicles, a large chunk of oil use can be reduced.
Tracie Yang (04:09):
So India, where you're based, now produces some of the cheapest clean power in the world. How did that happen? And how can India help its neighbors do something similar?
Anindya Upadhyay (04:19):
I think India is certainly a success story when it comes to renewable energy. In a short span of five years, it has become the fifth largest installer of renewable energy in the world. And as you said, it has also built projects applying some of the cheapest renewable energy globally. But this has been achieved due to setting of a formal renewable energy target by the government and dedicating specific policies and agencies to implement it. Like I said, you cannot have a clean world, a green world without dogged policy focus. Integrating environment choices and planning economy growth is a conscious choice that any government needs to make in order to contain emissions and global warming.
Anindya Upadhyay (05:05):
As far as India helping the South Asian region goes, India co-founded a grouping of sunshine countries called the International Solar Alliance with France in 2015. The aim of this inter-governmental body is to address challenges to scale up solar energy applications in countries that do not have proper energy access and mobilize resources for them. So the South Asian region is one of the world's most densely populated region with poor energy access. And India is well-positioned to share its learnings to provide affordable energy access to remote households and small businesses in the neighboring regions. India is also an agriculture dominated country, and it has used a lot of clean technology even in agriculture, which it can easily share with the neighboring countries which are also heavily agri-dependent.
John Rieger (06:00):
Anindya, if the economic case for green energy is so compelling, why do you continue to stress the need for political will?
Anindya Upadhyay (06:06):
So both of these things go together and green energy has proved itself on the merit of economics. Green energy is now, as I said, cheaper than coal. It's become the cheapest energy in the world now. And therefore, renewable energy has kind of proven that clean technology is actually a winner. It marries economics with climate. And I think India has very successfully exemplified that. However, there are agencies and climate experts out there who are still saying that if we continue our current base of renewable energy installation, we are heading towards energy share of 17% from green sources by 2030, whereas we need to be at 28% of energy share by 2030 to meaningfully keep global temperatures down in line with climate targets. This means investment in renewable energy needs to increase a lot more and countries need to raise their green energy commitments a lot more. And that means even more political will is required from this point on, even though green energy has proven that it is cheaper than all other forms of energy.
Tracie Yang (07:24):
So then has the pandemic shown us that we're ready to take renewable energy in a new direction?
Anindya Upadhyay (07:30):
Absolutely. I think the blue skies and clean air that the world has witnessed during pandemic-induced lockdowns has underlined the intricate relationship between climate and energy. And this has shown that the kind of future that we wanted to attain is here already. This is the new normal as you can see it, the blue skies, the clean air, and this is what world leaders, countries across the world have been trying to achieve with their climate targets. You've already been shown what you can achieve. Now it is not something which is just a matter of governmental decisions. It's also something that people at large have experienced. And I know that nobody wants to lose it.
Tracie Yang (08:19):
Anindya Upadhyay in New Delhi, thanks for joining us.
Anindya Upadhyay (08:23):
My pleasure. Thank you John and Tracie.
John Rieger (08:26):
And that's all for this edition of InAsia. Energy analyst, Anindya Upadhyay, has written thoughtfully about the clear skies of the pandemic, and you can find her recent essay in the InAsia blog. Until next time, I'm John Rieger.
Tracie Yang (08:39):
And I'm Tracie Yang.
John Rieger (08:40):
Thanks for listening.
