Stimulus-fuelled investment to rekindle economies after the corona crisis could help trigger a large-scale rollout of green energy sources and drive cost declines as the technologies progress. Both lithium-ion batteries and electrolysers are at the stage in their development where wind and solar were in 2008-2009, the IEA executive director Fatih Birol said, suggesting “they have the potential to be the coming decade’s breakout technologies.”
Similar support schemes were once set up for wind and solar PV – “today both are cost-competitive in large parts of the global energy system in their own right,” Dr. Birol noted. Offshore wind, in particular, “is now ready for massive investment,” he stressed. Wind turbines are based on mechanical engineering in which European countries, especially Germany, have a comparative advantage. But solar panels are an extension of semiconductor electronics, an area where China already had a competitive edge.
Clean energy stimulus rekindles economy
Trying to revive the economy, governments around the world are cobbling together massive stimulus packages. These huge public spending programs will shape countries’ infrastructure and energy systems for decades to come.
Time is of the essence, given that the pandemic has triggered the biggest economic collapse since the Great Depression. Hence, the IEA is urging national government to put clean energy jobs at the centre of stimulus packages. Investing in energy efficiency also has large benefits for employment; previous stimulus plans in the United States and elsewhere supported large numbers of jobs by fuelling demand for the labour-intensive work of upgrading building.
Electricity and internet networks are vital to keep professionals connected while working from home and help industries get through the current crisis. However, current grids are not ready for a more electrified future in which wind and solar account for a rising share of power generation, the IEA warned. Governments should hence help TSO to integrate smart digital technologies in their operation to enhance grid stability.