The renewable energy sector is less optimistic about market growth in 2025, according to the 14th “Energy Industry Insights” survey by consultancy DNV. The study reveals that 74% of the renewable industry is optimistic about growth prospects for the coming year, down from 86% two years ago.
Between February and March this year, DNV surveyed 1.289 senior professionals from the oil and gas, power, renewables, industrial consumers and other areas of the energy industry. The survey included managers from Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America.
Key Challenges
Renewable sector professionals point to a lack of government policies or financing as significant barriers to growth, in addition to inadequate licensing and infrastructure issues.
Among those interviewed, 70% stated that the electricity grid infrastructure is still not able to adequately transport renewable energy sources to areas of high demand. Only 21% believe that the current transmission capacity planning is sufficient to allow the expansion of renewable energy.
“We are seeing a lot of challenges arise in delivering a large amount of infrastructure in a relatively short period of time,” says Jacqui Bridge, general manager of Energy Futures at Australian transmission network operator Powerlink Queensland.
Bridge said there were challenges around skilled labour, supply chains for materials, planning permissions and environmental and regulatory approvals. “The government is actively looking at how we can speed up approvals, doing things much more in parallel rather than in series,” he added.
The relentless growth of renewable energy is taking the sector into a new era, marked by challenges such as supply chain issues, rising costs, competitive pressure (both from rivals and alternative sources or services), delays in permitting and sustaining growth without subsidies and tax incentives.
According to the survey, the industry does not yet appear ready to embrace an era with less government . The majority of respondents (73%) believe that more government incentives and subsidies related to renewable energy and emissions reductions are needed.
“We are now moving away from government subsidies for renewables and towards power purchase agreements and capacity payments,” says Gerard Reid, co-founder of Alexa Capital, an investment bank focused on energy transformation.
He points out that renewable asset owners may need to add batteries to remain profitable, something that was not previously necessary. “This type of change makes developers and independent power producers more cautious,” Reid added.
perspectives
In 2024, for the first time, variable renewables (dominated by solar PV and wind power) will generate more electricity than hydropower.
By 2025, all renewables combined will generate more electricity than coal, while wind alone will produce more electricity than nuclear power.
By 2026, solar PV will also sur nuclear electricity generation, and by 2028, renewable energy resources are expected to generate 42% of all electricity globally.
Despite this spectacular increase, the world is still heavily dependent on coal, oil and natural gas, which supply around 80% of total global energy.
Electricity demand is growing faster than renewable electricity production, meaning renewables will only gain market share from fossil fuels in the early 2030s.
Click here to access the full study in English.
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