The buzz in clean energy

Renewable energy is experiencing a global surge, and India is among the five nations at the forefront of this change

Wind power is having a moment. Global installations are on the rise and are expected to remain buoyant over the next few years. Almost 110 gigawatts of new onshore and offshore wind capacity will be added in 2023, according to the most recent update from BloombergNEF, despite the challenges of input cost inflation and approval bottlenecks. Moreover, additions will be more than that in all subsequent years.

India is one of the world’s large gigawatt-scale markets and is also seeing a burst of activity. Cost-competitive wind power was a focus area in billionaire Mukesh Ambani’s plans for his conglomerate, Reliance Industries, announced last week. And so was solar.

The group aims to manufacture modules, cells, wafers, ingots, polysilicon, and glass at a single location by the end of 2025.

“Our first priority is to deliver a fully integrated, end-to-end solar PV manufacturing ecosystem. This will be one of the largest, most technologically advanced, flexible, and most cost-competitive solar giga factories globally,” he said.

BNEF estimates that the best fully integrated manufacturers can now make solar modules for 14.1 US cents per watt. It is, therefore, projecting another 9 per cent fall in solar panel prices to reach a new low of 14.5 US cents per watt by the end of the year.

Close to 400 gigawatts of new solar generation capacity is likely to come online globally this year, setting another record. India is one of the five largest markets in the world, behind China, the US and Brazil.

Solar will in fact attract more capital than oil production for the first time ever in 2023, according to the International Energy Agency.

India’s exports of solar panels to the US are on the rise, with trade barriers and tariffs imposed by the world’s largest economy discouraging exports from other regions. A new tariff on silicon cells that use wafers from China comes into effect in June 2024. In the first half of 2023, India shipped almost 2.3 gigawatts of modules to the US, up significantly from 0.6 gigawatts in 2022, according to US International Trade Commission data.

In other sectors, hydrogen electrolyser shipments are set to double in 2023, and again in 2024, despite project delays and technical problems being faced by manufacturers. BNEF forecasts shipments of 1.7-2.1 gigawatts, the lower end of expectations six months ago. Mr Ambani also spoke about plans to set up a “fully integrated, automated, giga-scale electrolyser manufacturing facility.”

The market for capturing carbon was abuzz with multiple significant announcements. Abu Dhabi National Oil Co, the biggest oil producer in the United Arab Emirates, announced that it would develop a project to capture 1.5 million metric tonnes of carbon dioxide per year. A part of this captured carbon will be permanently sequestered underground, while some will be used for enhanced oil recovery. The project is likely to be operational by 2026.

Warren Buffett-backed Occidental Petroleum formalised its long-term relationship with Carbon Engineering — a provider of direct air capture (DAC) solutions — by announcing that it would buy the startup for $1.1 billion. The DAC market could be worth $150 billion per year by 2050, according to BNEF. Equinor, meanwhile, acquired a 25 per cent interest in Bayou Bend CCS — one of the largest US carbon capture and storage projects coming up along the Gulf Coast in southeast Texas.

Contemporary Amperex Technology Co, or CATL, announced that its new Shenxing battery will be able to deliver superfast charging, with 400 km of range added in just 10 minutes and 700 km of travel possible on a single charge. BNEF expects this battery to make lithium iron phosphate (LFP) batteries more popular in new electric vehicles.

Vinfast, the Vietnamese electric vehicle maker that listed on the Nasdaq Global Select Market last week via a merger with special-purpose acquisition company Black Spade Acquisition, temporarily became more valuable than the likes of Goldman Sachs Group and Boeing. VinFast generated $634 million in revenue in 2022.

The number of passenger vehicles on the road in India could reach 100 million by 2040, up 150 per cent from the current level, according to BNEF’s latest outlook. The number of passenger vehicles on the road globally could expand 24 per cent from 2022 levels to 1.6 billion by 2040.

The writer is New York-based senior editor – global policy for BloombergNEF,

vgombar@bloomberg.net