2020 was a record year for the global wind power industry, but a new report published by GWEC warns that the world needs to install new wind power capacity three times faster over the next decade to achieve global climate targets.
Last year was a high point in history for the global wind industry with 93 GW of new capacity installed – a 53 percent year-on-year increase – however, the recent report published by the Wind Energy Council (GWEC) warns that this growth is not sufficient to ensure the world achieves net zero by 2050, the group said in a statement Thursday.
According to the Global Wind Report 2021, GWEC’s 16th annual flagship report, the world needs to be installing wind power three times faster over the next decade to stay on a net zero pathway and avoid the worst impacts of climate change.
Through technology innovations and economies of scale, the global wind power market has nearly quadrupled in size over the past decade and established itself as one of the most cost-competitive and resilient power sources across the world.
In 2020, record growth was driven by a surge of installations in China and the U.S. – the world’s two largest wind power markets – who together installed 75 percent of the new installations for that year and accounted for over half of the world’s total wind power capacity.
Today, there is now 743 GW of wind power capacity worldwide, helping to avoid over 1.1 billion tons of CO2 globally – equivalent to the annual carbon emissions of South America.
Yet, as the clean energy technology with the most decarbonization potential per MW, the report shows that the current rate of wind power deployment will not be enough to achieve carbon neutrality by the middle of this century, and urgent action must be taken by policymakers now to scale up wind power at the necessary pace.
“People and governments around the world are realizing that we have a limited window to head off dangerous climate change” said Ben Backwell, CEO at GWEC, adding, “while many major economies have announced long-term net zero targets, we need to make sure that urgent and meaningful actions are taken now to make sure this ambition is matched with fast growing investment and installations of renewable power on the ground and in the water.
“It is very encouraging to see record growth in China and US last year, but now we need the rest of the world to step up to get us where we need to be,” he noted.
“Our current market forecasts show that 469 GW of new wind power capacity will be installed over the next five years. But we need to be installing at least 180 GW of new capacity every year through 2025 to ensure we remain on the right path to limit global warming ……. Every year we fall short, the mountain to climb in the years ahead gets higher,” Backwell explained.
According to the scenarios that have been established by international energy bodies such as IRENA and the IEA, the world needs to be installing a minimum of 180 GW of new wind energy every year to limit global warming to well below 2°C above pre-industrial levels.
And it will need to install up to 280 GW annually to maintain a pathway compliant with meeting net zero by 2050. This means that the industry and policymakers need to work collaboratively and act fast to accelerate deployment.
GWEC is calling on policymakers to take a true ‘climate emergency’ approach to allow a faster ramp up including: Eliminating red tape and reforming administrative structures to speed up and streamline licensing and permitting for projects.
Additionally, to carry out a massive increase in investments in grid, ports and other infrastructure needed to allow the ramp up in installations; and revamp energy markets to ensure that they account for the true social costs of polluting fossil fuels and facilitate a rapid transition to a system based on renewable energy.
Feng Zhao, Head of Market Intelligence and Strategy at GWEC commented: “The wind industry must work together with governments, communities, as well as other sectors such as solar, storage, and oil & gas to find solutions to accelerate the energy transition as efficiently as possible.”
“Throughout the COVID-19 crisis, we saw how governments can quickly react to address a global crisis – this same urgency must now be applied to the climate crisis,” he added.
Consumer confidence hitting record high, but with hangovers left from pandemic
Global consumer confidence soared to record heights in the first quarter of 2021, according to The Conference Board: Global Consumer Confidence Survey, as vaccination campaigns broadened, travel restrictions loosened, and governments and central banks continued to provide robust economic stimulus.
These factors are contributing to various geographic regions returning to a “state of normalcy sooner” including increased spending across the spectrum, but some economic hangovers persist from the global pandemic crisis.
The Conference Board is a member-driven think tank that has delivered economic insights since 1916. It released this recent global consumer confidence survey on Wednesday. Their methodology for what is comparably a business cycle index is based on a point system where a figure above 100 is considered positive, or below 100 representing decline. This survey also employs opinion polling which is expressed as percentages.
“The lightening of consumer moods globally bodes well for spending throughout the remainder of the year as economies continue to emerge from the 2020 pandemic-induced economic downturn and work toward arresting the spread of the virus,” said Dana Peterson, Chief Economist of The Conference Board.
“Nonetheless, the global economic recovery – and, consequently, consumer sentiment – is likely to continue to vary notably from region to region. Economies with greater access to vaccines are likely to achieve herd immunity, and thus will return to a state of normalcy sooner,” Peterson added.
The survey found that overall global consumer confidence shot up from 98 in the fourth quarter of 2020 to 108 points in the first quarter of 2021. That figure exceeded the reading of 106 registered in pre-pandemic 2020 Q1. Reminder, a figure above 100 is considered positive and the 108-point score is the highest recorded since the survey began in 2005.
Confidence rose in 49 of 65 markets surveyed, as economic activity resumed, COVID-19 cases peaked in many economies, and vaccine development and distribution expanded.
The vaccines contributed to that revival, so individual economies’ level of access to them will greatly affect the timing of their recoveries and boosts in consumer confidence. (For 2020 Q4 indexes, results exclude China due to data collection constraints.)
Confidence still varied across regions: Latin America (up 13 points, from 86 to 99) and Europe (up 11 points, from 76 to 87) enjoyed the biggest gains in consumer confidence. But both regions started from low bases, and Europe remains the least confident region. North America, by contrast, slipped six points, from 116 to 110, while Africa and the Middle East dropped from 101 to 97.
Growing confidence in personal finances, especially, propelled the stronger global sentiment: Consumers were significantly more optimistic about their finances in Q1 2021, with the gap between positive and negative responses standing at +29 percentage points, up substantially from +15 percentage points in Q4 2020.
Of the three key drivers of global confidence, personal finances made the largest impact, although the other two drivers also trended upward: Sentiment about job prospects were up overall around the globe and spending intentions flipped from negative (-7 ppts) in Q4 2020 to positive (+6 ppts) in Q1 2021.
Consumers are gearing up for a return to normalcy: Consumers spent more on entertainment outside of the home, clothing, and vacations. Taken together, these trends indicate that consumers are increasingly looking forward to returning to normal activities at some point this year.
Given that consumption levels significantly contribute to growth in many mature economies, such activity in anticipation of greater freedom later on supports The Conference Board’s upwardly revised projection of 5 percent real GDP growth globally this year.
However, around the world, consumers also ramped up their protective savings: 57 percent of global consumers indicated that they are putting money into savings, an increase of 9 ppts from the previous quarter. Their efforts to economize primarily reflected savings on hospitality and entertainment services.
Consumers planned to eliminate annual vacations, delay upgrading technology, and cut meals away from home. They also switched to cheaper grocery brands and drove their cars less.
The scars of the recession lingered, with health and economic concerns still looming large.
The world is not quite buzzing yet.
A strong majority of consumers (64 percent) said that their market was still in recession during the first quarter of 2021. While that figure dropped sharply from the end of 2020 (down 17 percentage points, from 81 percent) recession concerns remained elevated.
Globally, only 41 percent of consumers expected that their economy would be out of recession in 12 months, virtually unchanged from the previous quarter.
Consumers’ worries about their own health (22 percent) and economic performance (20 percent) dominated their top concerns. This trend will likely hold through mid-2021 given the continued crisis, and the time it will take to arrest the coronavirus and establish herd immunity.
“With uncertainty around jobs and health prompting consumers to continue economizing, it seems clear that GDP returning to pre-pandemic levels will not in itself mark a return to the old normal,” said board chief economist Peterson. “Healing in labor markets may take longer, with greater potential for scarring among industries that are vulnerable to automation and digital transformation.”
Unbound by geography, CFOs look to capitalize on global talent pool
A large majority of CFOs around the world are planning to expand operations into new countries in 2021 to achieve their long-term growth strategies, according to a recent survey by CFO Research and Globalization Partners.
The survey also uncovered changing perceptions about hiring and remote work because of their pandemic experiences, with respondents saying they want to attract from the global talent pool that is unbound by the geographic restrictions of their company’s operating model.
The February 2021 survey of chief financial officers, chief executive officers and other senior finance executives also cites a common theme that they are prioritizing the need to build resiliency and although optimistic, disclose that their businesses are still stabilizing and in recovery.
Optimism towards organizational performance in 2021 varies across the regions. Asia-Pacific (APAC) CFOs are more optimistic about success in 2021 than their counterparts in the UK and North America. Since 65 percent of APAC respondents indicated that they expect to exceed goals and expectations in 2021, compared to 46 percent for UK and 47 percent for North America.
“The ongoing rollout of COVID-19 vaccines, investments flowing into the region, and momentum gained as companies accelerated their digital investments during the pandemic – all these are contributing to positive sentiments toward business in 2021,” said Charles Ferguson, General Manager, Asia Pacific, Globalization Partners. “With the ongoing shift in the global supply chain and a renewed focus of the US, UK and EU to grow alliances with APAC markets, there is an abundance of opportunity to expect from this region.”
CFOs’ global view within their hiring approaches
When asked to describe their hiring strategy over the next 12 to 18 months as, 48 percent of APAC respondents say they will attract new talent where they are based while 43 percent say they want to attract new talent that is unbounded by the geographic restrictions of their company’s operating model.
APAC CFOs have a high degree of interest in tapping into a more cost-effective, global talent pool—a concept favored by half of those surveyed –and capturing market share through global expansion, which is favored by 61 percent.
CFOs’ altered workforce management strategies
Seventy-four percent of the survey respondents in APAC anticipate operating remote and/or hybrid workforce models in the next 12 to 18 months.
Eighty-three percent of executives also say the COVID-19 pandemic fundamentally altered the way they think about hiring and workforce management and 89 percent say it altered how they consider remote employees or the work-from-anywhere model.
In parallel, CFOs are deeming global expansion as a top priority in the next 12 to 18 months.
“Implementing a strategy for global expansion and presence” was deemed a top priority in the next 12 to 18 months for 52 percent of APAC executives, compared to 38 percent of the EMEA executives and 36 percent of the North American executives.
With that in mind, 55 percent of the APAC CFOs that are expecting to achieve their goals in 2021 are already engaging a global (Professional Employer Organization) PEO, while 25 percent plan to use a global PEO within one year to support their international business strategy and 17 percent plan to engage a global PEO within three years.
United Airlines highlighting new emphasis on sustainable fuel along with global corporate partners
United Airlines is setting a course toward a sustainable future with the launch of its Eco-Skies Alliance – working with the airline, more than a dozen leading global corporations will collectively contribute towards the purchase of approximately 3.4 million gallons of sustainable aviation fuel (SAF) this year.
With its nearly 80 percent emissions reductions on a lifecycle basis compared to conventional jet fuel, this is enough SAF to eliminate approximately 31,000 metric tons of greenhouse gas emissions, or enough to fly passengers over 220 million miles.
As inaugural participants, a number of top corporate names are becoming part of the program, with the hoped-for effect of creating and increasing demand for SAF, including Autodesk, Boston Consulting Group, CEVA Logistics, Deloitte, DHL Global, DSV Panalpina, HP Inc, Nike, Palantir, Siemens, and Takeda Pharmaceuticals.
“While we’ve partnered with companies for years to help them offset their flight emissions, we applaud those participating in the Eco-Skies Alliance for recognizing the need to go beyond carbon offsets and support SAF-powered flying, which will lead to more affordable supply and ultimately, lower emissions,” said United CEO Scott Kirby.
“This is just the beginning. Our goal is to add more companies to the Eco-Skies Alliance program, purchase more SAF and work across industries to find other innovative paths towards decarbonization,” he added.
According to its media statement, United has made the airline industry’s single largest investment in SAF and has purchased more SAF than any other airline in the world.
World Energy, a long-term partner of United, will supply the SAF to Los Angeles International Airport (LAX), which makes it conveniently accessible to United’s operations.
In addition to the Eco-Skies Alliance program, United is giving customers the ability to contribute funds for additional SAF purchase or for use on initiatives United believes will help decarbonize aviation – the first of any U.S. airline to do so. Understanding there is a growing interest among customers for real, lasting solutions, this new capability will be available starting immediately via portal on at: united.com/ecoskiesalliance.
The company added in its statement that strong federal and state policy leadership will be essential to reducing the climate impacts of air travel, so starting immediately United will help individuals connect with elected representatives to advocate for policies that would make air travel more sustainable for the long term.
United will be the first airline in the world to connect customers directly with policy makers to voice the support that is needed to advance and accelerate permanent, scalable solutions that hold the potential to decarbonize the air transportation industry – and not just offset emissions.
“We know there is a growing demand from a wide range of our customers including corporations, cargo shippers and individuals who share the same concern we do – that climate change is the most pressing issue of our generation,” Kirby said.
United says it’s making a 100 percent “Green Commitment,” noting that the company believes the airline industry needs to be bolder when it comes to making decisions that confront the climate crisis.
“That’s why we’ve committed to become100 percent green and reduce our greenhouse gas emissions 100 percent by 2050 by taking the harder, better path of reducing emissions from flying, rather than relying on traditional carbon offsets,” the company said in its statement.
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