Global Surge in Renewable Energy Investments Outshines Natural Gas

An international analysis forecasts a notable upswing in renewable energy investments, positioning solar and wind energy to surpass natural gas in electricity generation within the next few years. The research, conducted by BMI, a division of Fitch Group, projects that by 2028, renewables excluding hydropower will account for 23.7% of global electricity production, overtaking natural gas, which is anticipated to make up 21.9%.

This shift is not confined to global trends but is also expected to manifest across Asia, challenging the current dominance of natural gas in the energy mix. Despite natural gas’s growing role in electricity generation throughout the decade, the aggressive financing in solar and wind capacities is set to elevate renewables beyond natural gas outputs.

In the Philippines, the government views natural gas as a transitional fuel towards a more renewable-centric energy framework. However, the tilt towards renewable sources like solar, wind, and hydropower is gaining momentum among local energy developers.

As of August 2023, data from the Philippine Department of Energy revealed that natural gas comprises 18.8% of the nation’s installed energy capacity, with renewables slightly leading at 22%. Coal remains a predominant source, accounting for nearly half of the country’s energy capacity.

The International Energy Agency (IEA) anticipates a 2.5% growth in global gas demand, attributed to colder weather conditions and falling gas prices. Yet, the IEA also cautions about potential tightness in gas supply in 2024 due to limited increases in global production.

Further, BMI’s analysis suggests a global downward trend in coal generation per capita by 20% come 2032, indicative of a significant shift towards greener energy sources amid growing environmental concerns. However, coal is expected to remain a substantial energy contributor in Asia over the next eight years, given the region’s established infrastructure and economic reliance on coal.

This transition underscores a critical pivot in energy production dynamics, driven by environmental imperatives and the global movement towards sustainable and alternative energy solutions. As renewable energy investments continue to escalate, they pave the way for a cleaner, more sustainable energy future, challenging traditional fossil fuel dominance.