MOSCOW (MRC) -- Global capex spending on renewables is poised to bounce back in 2021, rising 8.5% to USD255 B—in line with 2019 levels, according to Roger Diwan, vice president, financial services and the IHS Markit Energy Advisory Service, as per Hydrocarbonprocessing.
Annual spending is expected to remain at those levels through 2025. This adds up to a USD1.3 T cumulative 2021-2025 spend—a 9% increase over cumulative capex in 2015-2019. At the same time, sharply declining capital costs across renewable technologies mean that just a 9% increase in spending will be associated with a 45% increase in cumulative gross renewable capacity additions in 2021-2025 vs. 2015-2019.
The findings are part of the new IHS Markit Energyview – Climate and Cleantech and Climate and Cleantech Advisory Briefing services. The expected recovery follows a 2020 that saw the renewables sector hit by supply chain disruptions and construction delays stemming from COVID-19 lockdowns and mobility restrictions, among other factors. IHS Markit expects 2020 global non-hydro renewables capex will be USD235 B, down 7% from 2019 levels.
IHS Markit expects the global benchmark capital cost for solar PV (both utility scale and distributed generation) in 2025 to be roughly 40% below 2017 levels. Meanwhile, global benchmark capital costs for onshore wind and offshore wind in 2025 are forecast to be 20% and 15% below 2017 levels, respectively.
Solar photovoltaic (PV) will continue to account for the majority of cumulative global new investment and gross capacity additions in 2021-2025. IHS Markit expects solar PV to account for approximately 54% (nearly USD700 billion) of global cumulative investment in the renewables sector.
Global offshore wind investment will accelerate swiftly during the 2021-2025 period. Cumulative investment of USD170 billion is expected—a nearly threefold increase from cumulative 2015-2019 levels.
Meanwhile, onshore wind capex is forecast to slow, reflecting a deceleration in onshore wind installations globally post-2021. Cumulative investment in offshore wind is expected to be USD320 billion for 2021-2025, down from the 2015-2019 level of nearly USD365 billion.
The overall growth in capex and capacity additions is expected to push combined global wind and solar PV installed capacity beyond that of global installed natural gas-fired capacity in 2023 and installed coal-fired capacity in 2024. In terms of global electricity generation, renewables will rise to an 18% share in 2025, up from 11% in 2019.
As per MRC, Australia has moved into the three most attractive countries in the world for renewables investment for the first time due to rapid solar photovoltaic (PV) deployment, research shows. In a bi-annual index of the top 40 renewable energy markets worldwide by consultancy EY, the United States held on to top spot, followed by China. Australia rose to third place, from fourth in the last ranking in May, while India climbed to fourth from seventh due to record low solar tariff bids and a new target for renewables generation, EY said.
We remind that the light-feed 625,000-metric tons/year Borealis steam cracker at Stenungsund, Sweden, is expected to restart operations in the fourth quarter this year after a fire broke out at the plant in May, 2020. The cracker has been under force majeure ever since after the blaze at the plant on 10 May, which was subsequently brought under control the following day.
Ethylene and propylene are feedstocks for producing PE and PP.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.
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