the silent revolution – past and current market developments
A new analysis of the global power plant market shows that since the late 1990s, wind and solar installations grew faster than any other power plant technology across the world - about 430,000 MW total installed capacities between 2000 and 2010. However, it is too early to claim the end of the fossil fuel based power generation, because more than 475,000 MW of new coal power plants were built with embedded cumulative emissions of over 55 billion tonnes CO2 over their technical lifetime.
The global market volume of renewable energies constructed in 2010 was on average, equal to the total global energy market volume (all kinds) added each year between 1970 and 2000. There is a window of opportunity for new renewable energy installations to replace old plants in OECD countries and for electrification in developing countries. However, the window will close within the next few years without good renewable energy policies and legally binding CO2 reduction targets.
Between 1970 and 1990, the OECD43 global power plant market was dominated by countries that electrified their economies mainly with coal, gas and hydro power plants. The power sector was in the hands of state-owned utilities with regional or nationwide supply monopolies. The nuclear industry had a relatively short period of steady growth between 1970 and the mid 1980s - with a peak in 1985, one year before the Chernobyl accident - and went into decline in following years, with no recent signs of growth.
Between 1990 and 2000, the global power plant industry went through a series of changes. While OECD countries began to liberalise their electricity markets, electricity demand did not match previous growth, so fewer new power plants were built. Capital-intensive projects with long payback times, such as coal and nuclear power plants, were unable to get sufficient financial support. The decade of gas power plants started.
The economies of developing countries, especially in Asia, started growing during the 1990s, triggering a new wave of power plant projects. Similarly to the US and Europe, most of the new markets in the ‘tiger states’ of Southeast Asia partly deregulated their power sectors. A large number of new power plants in this region were built from Independent Power Producer (IPPs), who sell the electricity mainly to state-owned utilities. The majority of new power plant technology in liberalised power markets is fuelled by gas, except for in China which focused on building new coal power plants. Excluding China, the rest of the global power plant market has seen a phase-out of coal since the late 1990s with growing gas and renewable generation, particularly wind.