Wind to dominate renewables growth over the coming decade, Fitch says

Green energy and natural gas will have similar proportions in the power generation mix, but coal will prevail

Saudi Arabia will see the highest wind power capacity additions for the sector in the region over the coming decade. Reuters

Non-hydro renewables, led by wind and solar, will reach 2.4 terawatt of installed capacity worldwide by 2028, according to Fitch Solutions.

Wind will account for 44 per cent while solar will make up for 49 per cent of power generation in the renewables sector, fuelled by rapid growth in markets such as China that are increasingly looking to make the switch to green energy.

Solar will continue to dominate, but the wind segment will emerge as a significant source of electricity over the next decade led by the "higher capacity factor of wind power technology, particularly offshore wind", according to the report.

Renewable capacity addition grew 14.5 per cent last year, nearing the record-breaking increase seen in 2017, but still accounted for only a third of the increase in power generation, BP said in its annual statistical review, an important bellwether for the global energy industry. BP chief executive Bob Dudley said installing renewables is key to "decarbonising the power sector", which is the biggest challenge facing the global energy system over the next two decades.

China, keen to move away from polluting coal for power generation, will see the fastest expansion in the non-hydro renewables space, said Fitch. The country is expected to add more than 580 gigawatts of power capacity from the end of 2018 to 2028, twice the addition in the US and India put together.

Much like BP, Fitch said  the proportion of renewables in the energy mix will remain muted, accounting for 15 per cent overall by the end of 2028. Coal will remain the dominant fuel, with renewables having to play catch-up with natural gas, which is favoured by economies such as China as a reliable transitional fuel.

“Total coal power generation will still be me more than twice that of renewable energy by the end of our forecast in 2028," according to the report.

"This view is anchored in our expectation that coal-fired power generation will remain a key component of the power mix in many emerging markets over our 10-year forecast period – notably in South Asia and South East Asia,” Fitch added.