Renewable Energy News Update – March 2022

Renewable energy is a major focus for national governments and big businesses alike, especially amidst an increasing emphasis on combating global climate change. This news update brought to you by Ideal Power offers a round-up of just some of the most eye-catching headlines around renewable energy and the market opportunities associated with them. 

This month, big developments in renewable energy include Europe’s largest economy setting new targets for 100% renewable energy, the challenges posed by rising nickel prices due to the Russia-Ukraine conflict, and a review of reports that shed light on where renewable energy has been and where it’s going.

Germany aims for 100% renewable energy by 2035

Germany announced recently it intends to fulfill all demand for electricity through renewable sources by 2035, moving away from all fossil fuels. According to a draft paper from the German government obtained by Reuters, Germany’s Renewable Energy Sources Act (EEG) has been drafted and should be submitted for legislative consideration shortly. In addition, the country should be able to meet 80% of its energy needs with wind and solar by 2030. 

According to Reuters, that estimate means Germany would double onshore wind energy production by 2030, generating 110 gigawatts of electricity annually, while offshore wind energy would reach 30 gigawatts. Solar energy would be the leading source for Germany in 2030, Reuters reports, with production tripling to 200 gigawatts annually. In addition to developing its renewable energy infrastructure, Germany plans to shutter its nuclear power plants as well. 

Rising nickel, steel prices could hinder renewable energy growth

Nickel prices are skyrocketing as a result of the Russian invasion of Ukraine and subsequent sanctions on the steel- and nickel-producing nation by Western governments. As nickel rises to $100,000 per metric ton, industries like renewable energy and electric vehicles will be impacted by surging nickel and steel prices. 

A recent short-term bump in renewable energy stocks could likely be traced to dramatically rising oil prices and a European desire to avoid buying Russian oil and gas, but the jump in steel and nickel prices – also major exports of Russia and Ukraine – means the expansion of renewable energy installations will likely slow as raw materials needed for their construction become more expensive. 

For investors, this could mean a mid-term decline in share value, even though the long-term outlook for renewable energy remains strong. As sanctions on Russia continue to pile up, their key mining role in the renewable energy supply chain will need to be replaced to stave off rising prices.

Report examines renewable energy industry in 2021

According to a report from Inside Climate News, renewable energy production increased significantly in the U.S. in 2021, increasing by 5.5% year over year, surpassing nuclear energy production, which declined by 1.5% year over year. 

However, coal energy production eclipsed renewable energy production once again after a strong comeback, growing by 16.2% year over year after facing a decline of more than 51.4% since 2010. Still, according to the report, coal’s decline is expected to continue as renewables steadily rise — the report notes that energy companies plan to close coal-fired power plants by 2028, eliminating 70 gigawatts of coal-generated power.

For renewable energy, the future looks much brighter. In 2021, renewable energy generated 826,387 gigawatt-hours of energy. Here’s a breakdown of some of the major types of renewable energy that contributed to the growth of the broader sector:

• Wind still leads the way, generating 379,767 gigawatt-hours in 2021. 
• Hydro-power was the next most prominent source of renewable energy, generating 260,225 gigawatt-hours of energy last year. However, it’s worth noting this represented a decrease of 8.8% from 2020. 
• Utility-scale solar was the fastest-growing source of renewable energy in 2021, expanding by 29.8% year over year to generate 111,755 gigawatt-hours. 
• Small-scale solar also grew rapidly, at a rate of 18.1% year over year, generating about 49,025 gigawatt-hours in 2021.

In addition to these sectors, geothermal energy and biomass energy contributed to the overall growth of the renewable energy space as well, growing by 2.2% and 1.4% year over year, respectively.

Renewable energy semiconductor device market report released

It’s no secret in the industry that a semiconductor device shortage plagues renewable energy infrastructure expansion, and the use of these devices is expected to grow significantly in the next five years. According to a report by Report Linker, semiconductor devices in the global renewable energy market will see a boom in demand ranging from 8% to 10% compound annual growth rate through 2027.

Currently, the renewable energy semiconductor device market includes a wide range of semiconductor device types, including:

• SiC Discrete
• SiC Power Module
• GaN Discrete
• GaN Power Module
• IGBT Module
• IGBT Discrete
• SJ MOSFET
• LV MOSFET

However, the challenges in meeting demand in a rapidly growing industry like renewable energy remain stark. Furthermore, the limitations of existing semiconductor devices means renewable energy installations can only be so efficient and still face significant energy waste and heat management issues. To that end, the development of new semiconductor devices like the bidirectional bipolar junction transistor (B-TRANTM) could dramatically remake the market while bolstering supply as demand continues to rise.

Renewables outlook remains strong despite new challenges

The long-term outlook of the renewables market remains bright. Analysis performed by Allied Market Research estimates that the space will grow in market value from $882 billion in 2020 to $2 trillion by 2030, an 8.4% compound annual growth rate (CAGR). Deloitte anticipates the major driving factors of this growth include increased innovation in technology, improved infrastructure development, and declining costs in renewable energy technology.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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