Baku, Azerbaijan, December 18. The COP29 summit has unleashed a wave of ambitious climate commitments, with countries such as Indonesia, Mexico and the European Union pledging net-zero targets and phasing out coal with support from the 25-nation bloc, according to research by Rystad Energy. The trend report revealed:
According to Artem Abramov, head of clean technology research at Rystad Energy, these pledges keep exponential growth in low-carbon energy firmly on the global agenda. However, 2025 is expected to be a significant test for renewable energy and clean technologies due to policy changes, financing uncertainty, and market pressures.
Abramov points out that the global battery and solar PV markets are likely to remain oversupplied in 2025, leading to falling prices. Nonetheless, the regional biofuels market could rebound as blending mandates come into effect, creating opportunities for growth in the clean energy sector.
The EU is also prepared to bring significant changes to carbon markets, including phasing out free allowances and implementing the Carbon Border Adjustment Mechanism (CBAM). Rystad Energy predicts that these developments will pave the way for final investment decisions on projects related to low-carbon hydrogen and carbon capture, utilization and storage (CCUS).
Despite these challenges, the solar PV sector is expected to grow to approximately 600 TWh in 2025, marking the milestone of its annual energy contribution matching that of oil for the first time. Given the superior energy efficiency of solar compared to crude oil, this growth is equivalent to providing two to three times more useful energy.
However, headwinds continue. Falling capture prices remain a key concern for the solar sector, although record low battery storage costs offer a timely solution to alleviate some of the pressure.
