Supply Chain Constraints Aren’t Holding Back Renewables Investments
– Global allocation hits record $226bn
– US govt to invest $26m in grid demonstration projects
Amid the supply chain woes inflicted by the COVID-19 pandemic and slow recovery in manufacturing, global investments in renewable energy climbed to a record $226 billion in the first half of 2022 according to a report from BloombergNEF. The report, titled Renewable Energy Investment Tracker 2H 2022 stated that the increasing demand for clean energy to confront the energy crisis and inflation created by sanctions imposed in the aftermath of the Russian invasion of Ukraine fueled investor appetite.
World Energy quoted Albert Cheung, head of analysis at BloombergNEF as saying: “Policymakers are increasingly recognising that renewable energy is the key to unlocking energy security goals and reducing dependence on volatile energy commodities.”
Cheung added: “Despite the headwinds presented by ongoing cost inflation and supply chain challenges, demand for clean energy sources has never been higher, and we expect that the global energy crisis will continue to act as an accelerant for the clean energy transition.”
Solar and wind, which have been disrupted by rising finance and material costs, supply chain disruptions have seen growth in investor commitments with wind rising by 16% from the corresponding period of 2021 at $84 billion, and solar by 33% to $120 billion during the
same period. China was noted specifically for significant investment growth as large-scale solar investments totaled $41bn in H1 2022, a 173% upshoot from H1 2021 and 107% jump in wind with $58 billion invested.
In a related development, the Biden administration in the United States has reportedly launched a $26 million-funded project in a bid to demonstrate the US electricity grid can reliably run entirely on renewables and energy storage. President Joe Biden had unequivocally shown his commitment to fulfilling his campaign promises of reducing the US’ reliance on fossil fuels with the shutdown of the Keystone pipeline during his earlier days in office. However, the global energy crisis forced his hands into approving the release of strategic reserves to quell the rising energy costs, exposing a flaw in the renewables’ strategy.
The demonstration project is aimed at convincing the American public of the potentials of renewables in power generation according to a report by World Energy. The programme, handled by the US Department of Energy, will be looking into how renewable can maintain
grid reliability and allow it to stay connected during disturbances or reboot in case of a shut down.
Jennifer Granholm, US Secretary of Energy, was quoted as saying: “Thanks to funding from President Biden’s Bipartisan Infrastructure Law, DOE is proving that transitioning to solar, wind, and other renewable energy sources can keep the lights on without service interruptions, while creating good paying jobs.”
The programme will fund up to ten projects that demonstrate how solar PV plants, wind and energy storage with a capacity mix of at least 10 megawatts (MW) can support the power grid by automatically adjusting to different demands and disruptions as well as preventing
blackouts.
