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Solar pushes aside coal as the cheapest fuel for power, IEA says

EconOct 13. 2020A solar panel farm in China. MUST CREDIT: Bloomerg photo by Qilai Shen 

By Syndication Washington Post, Bloomberg · William Mathis, Jeremy Hodges · BUSINESS, SCIENCE-ENVIRONMENT 

Renewables are set to overtake coal this decade as the world’s favorite fuel to generate electricity, the International Energy Agency says.

Solar photovoltaics are now cheaper than plants fired by coal and natural gas in most nations, the Paris-based researchers concludes in its annual report on global energy trends. Those cheaper costs along with government efforts to slash climate-damaging emissions will increasingly push coal off the grid and give renewables 80% of the market for new power generation by 2030, the IEA says.

The findings mark a profound shift away from fossil fuels in the world’s energy supply at a time when governments everywhere are looking for ways to rein in the greenhouse gases blamed for global warming. While hydroelectric plants will continue to be the biggest source of renewable power, solar is catching up quickly because the cost of manufacturing and installing panels has come down so much.

“I see solar becoming the new king of the world’s electricity markets,” Fatih Birol, executive director of the IEA, says in a statement with the report on Tuesday. “Based on today’s policy settings, it’s on track to set records for deployment every year after 2022.”

The IEA’s projections are based on what it calls the Stated Policies Scenario, which assumes covid-19 is gradually brought under control next year and the global economy returns to levels seen before the outbreak. The scenario includes announced policy intentions and targets that the IEA considers to be backed up by detailed measures for the plans to be enacted.

It also anticipates natural gas demand slowly easing in developed nations, especially Europe, and coal dropping everywhere. About 275 gigawatts of coal-fired capacity worldwide, 13% of the 2019 total, will be shut off by 2025, mostly in the U.S. and European Union. That will more than offset increases in coal demand in developing economies in Asia.

Coal’s share of the global power supply is set to fall to 28% in 2030 from 37% in 2019. By 2040, the fuel that once was a staple of utilities will fall below 20% for the first time since the industrial revolution, the IEA concludes. That decline could be even sharper if governments pick up the pace on decarbonization.

The assumptions require a massive investment in power grids, which need upgrades to absorb supply from more diverse sources that only work when the sun shines or the wind blows.

Investment to modernize, expand and digitize the grid will need to reach $460 billion in 2030, two thirds more than the cost last year. That spending will help roll out 2 million kilometers of new transmission lines and 14 million kilometers of distribution networks, 80% more than was added in the last 10 years, according to the IEA.

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IMF sees shallower recession, tough path back to full recovery

EconOct 13. 2020

By Syndication Washington Post, Bloomberg · Eric Martin · BUSINESS, US-GLOBAL-MARKETS 
The International Monetary Fund warned that the world economy still faces an uneven recovery until the coronavirus is tamed even as it offered a less-dire view of this year’s recession following massive stimulus from central banks and governments.

The fund now forecasts world gross domestic product to shrink 4.4% this year, compared with the 5.2% drop seen in June, according to the latest World Economic Outlook released Tuesday. For 2021, the IMF sees growth of 5.2%, down from 5.4%. The report includes revisions to June’s forecasts and other historical data to reflect updated country weightings.

The contraction would still be the deepest since the Great Depression, with covid-19 having killed more than 1 million people and shut down large swaths of business. The report sets the tone for this week’s annual meetings of the IMF and World Bank — being held virtually, like April’s spring meetings, due to the pandemic — as global policy makers discuss how to avert a wave of debt defaults in poorer nations resulting from the virus’s impact.

“Recovery is not assured while the pandemic continues to spread,” chief economist Gita Gopinath wrote in the report. “Economies everywhere face difficult paths back to pre-pandemic activity levels.”

The impact of the downturn has been cushioned by policy initiatives, including a European pandemic-recovery package, and large-scale central bank asset purchases, the fund said. Such unprecedented support helped ease financial conditions since June in advanced economies and in most emerging and developing economies, the fund said.

Policymakers must avoid prematurely withdrawing support in order to avoid setbacks, Gopinath said. The forecasts assume monetary policy is maintained at current settings through 2025, helping to alleviate debt service burdens for many countries. Governments globally have implemented $6 trillion in direct tax and spending measures, according to the IMF.

The fund’s forecast is based on the expectation that social distancing will continue into next year but gradually fade over time as vaccine coverage expands. It also is premised upon local transmission of the virus being brought to low levels everywhere by the end of 2022.

The upward revision in the IMF’s 2020 growth forecast reflects in particular better-than-projected second-quarter growth in the U.S. and the euro area, a stronger-than-anticipated return to growth in China and signs of a more rapid recovery in the third quarter.

The U.S. economy is projected to contract 4.3% this year, compared with a previous 8% estimate, the most-improved forecast among major economies. That doesn’t factor in potential additional fiscal stimulus, though, as President Donald Trump and Democrats continue to wrangle over measures. Growth is pegged at 3.1% in 2021, down from a prior forecast of 4.5%.

The euro area is estimated to shrink 8.3% this year, compared with the previous 10.2% projection, before expanding 5.2% in 2021, down from 6%. Advanced economies overall are seen declining 5.8% in 2020, compared with 8.1% previously.

By contrast, the outlook for emerging markets, some with rising infections, has worsened slightly, with a 3.3% contraction anticipated for this year, compared with 3.1% previously.

China remains the lone major economy estimated to expand, with 1.9% projected growth this year and an 8.2% boom in 2021. India saw the steepest forecast reduction, with a 10.3% contraction seen for this year, compared with just 4.5% previously, after a larger-than expected second-quarter contraction.

Overall, the fund sees global output by the end of 2021 being 0.6% higher than at the end of 2019, before the pandemic, but that’s driven almost entirely by China. Most other nations, including the U.S., will need to wait until at least 2022 to see full recovery to pre-virus levels.

The subdued outlook for medium-term growth will be accompanied by a significant increase in sovereign debt — by about 20 percentage points in advanced economies to 125% of GDP by the end of 2021, and by more than 10 percentage points in emerging and developing economies to 65% of GDP, according to IMF estimates.

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Gold price drops amid worries of delay in US economic stimulus until the election

EconOct 13. 2020

By The Nation

The price of gold dropped by Bt50 per baht weight in morning trade on Tuesday, the Gold Traders Association reported.

As of 9.19am, the buying price of a gold bar was Bt28,200 per baht weight and selling price Bt28,300 while gold ornaments were priced at Bt27,697.32 and Bt28,800, respectively.

At close on Monday, the buying price of a gold bar was Bt28,250 per baht weight and selling price Bt28,350 while gold ornaments were Bt27,742.80 and Bt28,850, respectively.

The Comex (Commodity Exchange) gold price to be delivered in December rose by US$2.7, or 0.14 per cent, closing at $1,928.9 (Bt60,241.88) per ounce on Monday.

Investors were buying gold as safe-haven assets due to uncertainty over the US political situation before the presidential election on November 3.

Meanwhile, investors were worried that US lawmakers would not be able to launch economic stimulus measures to mitigate the Covid-19 impact before the election.