Renewable power is growing robustly around the world this year, contrasting with the sharp declines triggered by the Covid-19 crisis in many other parts of the energy sector such as oil, gas and coal, according to a report from the International Energy Agency released today.
Driven by China and the United States, new additions of renewable power capacity worldwide will increase to a record level of almost 200 gigawatts this year, the IEA’s Renewables 2020 report forecasts. This rise – representing almost 90% of the total expansion in overall power capacity globally – is led by wind, hydropower and solar PV. Wind and solar additions are set to jump by 30% in both the United States and China as developers rush to take advantage of expiring incentives.
Even stronger growth is to come. India and the European Union will be the driving forces behind a record expansion of global renewable capacity additions of nearly 10% next year – the fastest growth since 2015 – according to the report. This is the result of the commissioning of delayed projects where construction and supply chains were disrupted by the pandemic, and growth in markets where the pre-Covid project pipeline was robust. India is expected to be the largest contributor to the renewables upswing in 2021, with the country’s annual additions doubling from 2020.
“Renewable power is defying the difficulties caused by the pandemic, showing robust growth while other fuels struggle,” said Dr Fatih Birol, the IEA Executive Director. “The resilience and positive prospects of the sector are clearly reflected by continued strong appetite from investors – and the future looks even brighter with new capacity additions on course to set fresh records this year and next.”
Over the first 10 months of 2020, China, India and the European Union have driven auctioned renewable power capacity worldwide 15% higher than in the same period last year – a new record that shows expectations of strong demand for renewables over the medium and long term. At the same time, shares of publicly listed renewable equipment manufacturers and project developers have been outperforming most major stock market indices and the overall energy sector. By October, shares of solar companies worldwide had more than doubled in value from December 2019.
However, policy makers still need to take steps to support the strong momentum behind renewables. In the IEA report’s main forecast, the expiry of incentives in key markets and the resulting uncertainties lead to a small decline in renewables capacity additions in 2022. But if countries address these policy uncertainties in time, the report estimates that global solar PV and wind additions could each increase by a further 25% in 2022.
Critical factors influencing the pace of deployment will be policy decisions in key markets like China, and effective support for rooftop solar PV, which has been impacted by the crisis as households and businesses reprioritised investments. Under favourable policy conditions, solar PV annual additions could reach a record level of 150 gigawatts (GW) by 2022 – an increase of almost 40% in just three years.
“Renewables are resilient to the Covid crisis but not to policy uncertainties,” said Dr Birol. “Governments can tackle these issues to help bring about a sustainable recovery and accelerate clean energy transitions. In the United States, for instance, if the proposed clean electricity policies of the next US administration are implemented, they could lead to a much more rapid deployment of solar PV and wind, contributing to a faster decarbonisation of the power sector.”
The electricity generated by renewable technologies will increase by 7% globally in 2020, underpinned by the record new capacity additions, the report estimates. This growth comes despite a 5% annual drop in global energy demand, the largest since the Second World War.
However, renewables outside the electricity sector are suffering from the impacts of the Covid crisis. Biofuels used in transport are set to experience their first annual decline in two decades, driven by the wider plunge in transport fuel demand this year as well as lower fossil fuel prices reducing the economic attractiveness of biofuels. Demand for bioenergy in industry is also falling as a result of the wider drop in economic activity. The net result of these declines and the growth of renewable power is an expected overall increase of 1% in global renewable energy demand in 2020.
Renewable fuels for transport and industry are an area in particular need of potential policy support, as the sector has been severely hit by the demand shock caused by the crisis. More can and should be done, to support deployment and innovation in bioenergy to supply sustainable fuels for those sectors.
The report’s outlook for the next five years sees cost reductions and sustained policy support continuing to drive strong growth in renewable power technologies. Total wind and solar PV capacity is on course to surpass natural gas in 2023 and coal in 2024. Driven by rapid cost declines, annual offshore wind additions are set to surge, accounting for one-fifth of the total wind market in 2025. The growing capacity will take the amount of renewable electricity produced globally to new heights.
“In 2025, renewables are set to become the largest source of electricity generation worldwide, ending coal’s five decades as the top power provider,” said Dr Birol. “By that time, renewables are expected to supply one-third of the world’s electricity – and their total capacity will be twice the size of the entire power capacity of China today.”
Lithuania: COVID-19 crisis reinforces the need for reforms to drive growth and reduce inequality
Effective containment measures, a well-functioning health system and swift public support to firms and households have helped Lithuania to weather the COVID-19 crisis to date. That said, the pandemic still carries significant economic risks, and the recent upsurge in infections is very concerning. Once a recovery is under way, Lithuania should aim to reform public companies, strengthen public finances, and ensure that growth benefits all people and regions, according to a new OECD report.
The OECD’s latest Economic Survey of Lithuania says that prior to COVID-19, good economic management and an investment-friendly business climate were helping to lift average Lithuanian incomes closer to advanced country levels. While the recession provoked by the virus has been milder than elsewhere – with GDP projected to drop by 2% in 2020 before rebounding by 2.7% in 2021 – Lithuania’s small and open economy will be vulnerable to any prolonged disruption to world trade. Increasing public investment and improving governance at state-owned enterprises could help lift growth and productivity. Other reforms should focus on improving the effectiveness of spending and taxation. Over the longer term, Lithuania should establish a clear debt reduction path and a long-term debt target.
“Lithuania’s sound economic management of recent years, and its swift response to both the health and economic aspects of the pandemic, are helping the country to weather the COVID-19 crisis,” said OECD Secretary-General Angel Gurría. “It is now key to build on these achievements and restart the reform engine to ensure robust, sustainable and inclusive growth for the future.”
The pandemic has exposed high levels of income inequality in Lithuania, where relative poverty is high among the unemployed, the less educated, single parents and older people due to a tax-benefit system that is insufficiently redistributive. The Survey recommends Lithuania to continue providing temporary support to people and businesses hit by COVID-19, as well as to increase regular social support while retaining incentives to work.
In terms of support to the economy, the Survey notes that while Lithuania’s government spending has increased considerably over the past two years, it remains below the OECD average. Public investment also remains low. Given the importance of modernising infrastructure and stimulating crisis-hit demand, the Survey recommends maintaining or increasing current levels of investment and improving investment quality by carrying out rigorous cost-benefit analysis for individual projects. Increasing investment in rural areas, and giving local government more say in tax policy and spending, could help reduce regional disparities and promote inclusive growth.
The Survey also recommends phasing out environmentally damaging fossil fuel subsidies and increasing environmental taxation, which would benefit public finances while helping the shift to a lower-carbon economy.
United States confirms its leading role in the fight against transnational corruption
The United States continues to demonstrate an increasing level of anti-bribery enforcement, having convicted or sanctioned 174 companies and 115 individuals for foreign bribery and related offences under the Foreign Corrupt Practices Act (FCPA) between September 2010 and July 2019. The United States is thus commended for a significant upward trend in enforcement and confirming the prominent role it plays globally in combating foreign bribery.
The 44-country OECD Working Group on Bribery has just completed its Phase 4 evaluation of the United States’ implementation of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and related instruments.
Given developments since the United States’ last evaluation in 2010, the Working Group made a range of recommendations to the United States, including to:
- Consider ways to enhance protections for whistleblowers who report potential FCPA anti-bribery violations by non-issuers and provide further guidance on available whistleblower protections;
- Continue to further evaluate and refine policies and guidance concerning the FCPA;
- Make publicly available the extension and completion of NPAs and DPAs with legal persons in foreign bribery matters as well as the grounds for extending DPAs in FCPA matters;
- Continue to evaluate the effectiveness of the Corporate Enforcement Policy in particular in terms of encouraging self-disclosure and of its deterrent effect on foreign bribery; and
- Continue to address recidivism through appropriate sanctions and raise awareness of its impact on the choice of resolution in FCPA matters.
The report praises the United States for its sustained commitment to enforcing its foreign bribery offence as well as its key role in promoting the implementation of the Convention. This achievement results from a combination of enhanced expertise and resources to investigate and prosecute foreign bribery, the enforcement of a broad range of offences in foreign bribery cases, the effective use of non-trial resolution mechanisms, and the development of published policies to incentivise companies’ co-operation with law enforcement agencies.
The report also notes a large number of positive developments and good practices, such as the DOJ’s reliance on several theories of liability to hold both companies and individuals responsible for foreign bribery, and the United States’ successful co-ordination that has allowed multi-agency resolutions against alleged offenders in FCPA matters. In parallel, the United States has increasingly sought to co-ordinate and co-operate in investigating and resolving multijurisdictional foreign bribery matters with other jurisdictions. Finally, the United States has helped foreign partners build their capacity to fight foreign bribery through joint conferences and peer-to-peer training thus enabling the law enforcement authorities of these countries to better investigate and sanction prominent foreign bribery cases.
The United States’ Phase 4 report was adopted by the OECD Working Group on Bribery on 16 October 2020. The report lists the recommendations the Working Group made to the United States on pages 111-113, and includes an overview of recent enforcement activity and specific legal, policy, and institutional features of the United States’ framework for fighting foreign bribery. In accordance with the standard procedure, the United States will submit a written report to the Working Group within two years (October 2022) on its implementation of all recommendations and its enforcement efforts. This report will also be made publicly available.
The report is part of the OECD Working Group on Bribery’s fourth phase of monitoring, launched in 2016. Phase 4 looks at the evaluated country’s particular challenges and positive achievements. It also explores issues such as detection, enforcement, corporate liability, and international co-operation, as well as covering unresolved issues from prior reports.
Skills and lifelong learning critical for all workers
The International Labour Organization has published a new guide for trade unions on skills development and lifelong learning.
The guide “Skills Development and Lifelong Learning: Resource Guide for Workers’Organizations” , published by the ILO’s Skills and Employability Branch and Bureau for Workers’ Activities (ACTRAV) addresses key challenges facing workers’ organizations, including best practices, key priorities and main challenges. It also outlines why trade unions should be involved in skills development and lifelong learning.
According to the guide, building the capacity and engagement of workers’organizations in skills development and lifelong learning, based on a human-centred approach and International Labour Standards, will help build a ‘better normal’ in the post-COVID-19 World.
“What matters in the end, is that ALL workers can acquire the skills of their choice to get jobs and to keep jobs, and to be equipped to face the transitions they will be confronted with over the working life. Skills development and lifelong learning are essential to enhance workers’ capabilities to participate fully in decent work, to contribute to human development, active citizenship and the strengthening of democracy,” said Maria Helena André, Director of the ILO’s Bureau for Workers’ Activities.
The guide is designed for workers’ organizations, trainers, facilitators and ILO officials. It is part of a comprehensive programme of support for workers’organizations in preparation for the 2021 International Labour Conference (ILC), which will discuss skills and lifelong learning. It also paves the way for the general discussion on standing setting for apprenticeships, which takes place at the ILC in 2022 and 2023.
“If the lifelong leaning notion has to become a reality, the link between the world of education and the world of work needs to be very strong, bringing these together, through a process of social dialogue where governments, employers, and workers organization jointly formulate policies and programmes,” said Srinivas Reddy, Director of the ILO SKILLS Branch.
A Global webinar bringing together workers’ organizations, technical experts, academics and senior ILO officials was held on the November 18th 2020 to launch the guide.
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