RE adoption to accelerate due to gas market volatility
Asia is expected to generate 831TWh of gas-fired power over the decade.
Gas market price volatility will compel new regions to speed up their adoption of renewable energy, according to a report by Fitch Solutions.
“In contrast to our outlook for coal, we highlight that lower carbon-emitting alternatives will rise in prominence, however despite many markets showing growth in the gas sector volatility will place pressure on the sector,” it said.
Fitch Solutions expect non-hydropower renewable capacity in the near term to continue its surge with an average annual global addition of 230 gigawatts (GW) between 2020 and 2024, from 141GW between 2016 and 2020.
Despite this, Asia is still expected to see the largest growth in gas-fired power output between 2022 and 2031 at 831 terawatt-hours (TWh), followed by the Middle East and North Africa (MENA) at 367TWh.
Fitch, however, stated that they expect markets in MENA to strengthen their efforts to cut domestic oil and gas consumption in the power sector and boost hydrocarbon experts in the near-to-medium term.
It added that the increased demand for non-Russian hydrocarbons in Western Europe along with high energy commodity prices will likely reinforce many MENA markets’ initiatives to reduce consumption of oil and gas, “weighing on conventional thermal power growth whilst supporting investment in non-hydropower renewables.”
Many key markets in MENA which include Egypt and the United Arab Emirates were amongst the fastest growing solar sectors globally.
“In general, rising gas prices cast doubt on the view that the sector will be used globally as a bridging fuel from coal to renewables,” it said.