To what extent will renewables benefit from global stimulus packages? – Analysis
Among spending on low-carbon electricity, we expect solar PV to receive the largest amount, accounting for almost half of low-carbon electricity spending (US $ 24 billion ) and split between large-scale photovoltaic energy and distributed photovoltaic energy. This stimulus money will mainly support already developed markets in China, Korea and the European Union to further accelerate investments. Nuclear power received around $ 9 billion in government spending, followed by offshore wind and onshore wind. Despite increasingly needed flexibility capabilities, transportable renewables, including hydropower, geothermal, and bioenergy, received only $ 3.5 billion. Likewise, biogas and biofuels received only around USD 3 billion, despite their major contribution to decarbonising hard-to-scale sectors such as aviation and heavy industry. Many governments view low-carbon hydrogen as the primary fuel for decarbonizing hard-to-reduce industries. This translates into significant public spending of around $ 30 billion on hydrogen. However, uncertainty remains as to whether this allocated expenditure will be for hydrogen produced from renewable or non-renewable energies.
In October 2021, almost three quarters of public spending on clean energy was allocated to Europe, followed by the Asia-Pacific region and North America. The share of renewables, including biofuels and renewable electricity, in overall clean energy expenditure ranged from 4% to nearly 56% depending on the region. In Europe and North America, spending on transport infrastructure and energy efficiency has overtaken renewable energies. In Asia-Pacific, the focus on meeting ambitious renewable energy targets has led to an increase in the share of renewables in overall clean energy spending, particularly in China and Korea.