While falling oil prices has had many questioning the mid-term prospects of solar and renewable markets, a series of analysts including Deutsche Bank and Bloomberg New Energy Finance have taken lengths to outline how barrel prices around US$60 will have little impact on renewable growth. In a statement today, Frost & Sullivan has confirmed this analysis.
"As oil now accounts for just 5% of global electricity generated, and in many countries it is 1% or below, it is just no longer considered a viable option for electricity generation, said Frost & Sullivan Senior Consultant Jonathan Robinson. By contrast, Robinson describes solar PV as being the hottest of the renewable technologies."
Solar capacity is predicted to increase from 93 GW in 2012 to 446 GW by 2020 in Frost & Sullivans Annual Global Power and Energy Outlook. Growth is expected to be driven by the Chinese, Indian and North American markets, which will have the highest capacity growth rates. Even Europe, where incentives have declined, will see its PV capacity double by 2020.
The increasing competitiveness of solar PV is one of the key drivers, with the analysis noting that commercial solar is increasingly competitive against centralized generation. Offshore wind by contrast, "is a long way from being viable without incentives."
Frost & Sullivan notes that "conventional fuels" will remain predominant sources of power, particularly in developing economies in Africa and Asia. China will continue to build coal-fired generation, although pollution concerns has seen the country also develop renewable and nuclear generation capacity.
"One country already suffering because of the lower oil price is Russia," noted Robinson. "This will mean a reduction in investment in new power generation capacity, as state entities lack the necessary funds and private investors lose confidence in the face of an economic crisis."
The falling oil price may impact solar deployment in the offgrid sector, where PV more often competes with diesel gen-sets. Mining applications in particular may be adversely affected.