Extreme heat waves, changes in the rain patterns, forest fires, and more intense storms caused by climate change increase its effects on people and ecosystems worldwide. It is worth remembering that the global temperature increase is currently at 1.1 degrees Celsius (1.8 degrees Fahrenheit) compared to the pre-industrial levels, and if we continue with the current policies and practices, it is expected to increase by 3 degrees Celsius or even more by the end of this century. Because when we consider the effect of even 1.1 degrees Celsius increase on our lives, it is obvious that the predicted scenarios are frightening.
In this respect, while the goal of keeping the global temperature rise below 1.5 degrees Celsius determined by the Paris Agreement is extremely critical, one of the most important roles in achieving this goal is undoubtedly to increase the use of renewable energy resources. For this reason, today, where the reliance on fossil fuels continues, serious investments and technological progress are needed to increase the efficiency of resources such as solar and wind energy. For a long time, countries have been taking steps in this direction and are trying to make renewable technologies applicable to the extent that they are ahead of fossil fuels.
In fact, the recent developments in renewable energy are quite promising. Renewable energy has already become the cheapest option in many parts of the world. As a result of the rapid decrease in costs in parallel with technological progress, the cost of generating electricity from solar energy decreased by 85% in 2020 compared to the 2010 prices. Falling prices are making renewable energy more appealing everywhere, including in low and middle-income countries, where most of the additional demand for new electricity sources is expected to come.
Developments that confirm these findings are already reflected in the statistics. Around 90% of the new additional capacity that came into operation globally last year occurred from renewable energy sources. Solar energy, on the other hand, is undoubtedly the most successful electricity source of the last decade. Although the global energy composition is largely based on traditional sources, solar energy stands out by far as the most important part of the new electricity capacity commissioned every year and is gradually becoming a sustainable and reliable energy supply source. It should not be forgotten that the effective use of solar energy is a very important tool that can greatly reduce greenhouse gas emissions from the electricity industry, increase energy security with the growth of the market, and contribute to green economic transformation all over the world.
While a record was broken in renewable energy facility installations in 2021, solar energy has taken a step forward at this point. In order to understand the position of solar energy, which was announced by the International Energy Agency (IEA) as the "new king" of the world electricity industry, it would be useful to look at more details.
According to the data, there has been a surge in the use of solar energy with the global solar photovoltaic (PV) capacity, increasing 25 times from 23 GW to 627 GW between 2009 and 2019. This shows the contribution to the solar PV market, which is supported financially and with legal incentives by many countries on a global scale. In addition to these incentives, it is possible to say that the reduction in production costs, especially with the innovation wave-led by Chinese panel manufacturers, is also effective in this development.
On the other hand, crises such as the global COVID-19 pandemic and the subsequent Russia-Ukraine war have also seriously affected the progress in solar energy. The IEA shares its finding that the cost of poly-silicon used in solar panels has more than quadrupled in the last 12 months while underlining that the price of steel has increased by 50% and the price of copper by 70%. In general, the raw material costs for all types of renewable energy are 15% to 25% higher, the organization said, acknowledging the increasing cost of raw materials used to build renewable energy facilities.
Despite these developments, although solar and wind energy costs are expected to remain higher in 2022 and 2023 than the pre-pandemic levels due to generally rising commodity and freight prices, the finding that their competitiveness has actually increased due to the much sharper increases in gas and coal prices is also stated by the IEA. The IEA also shared with the public as a promising development that the interest in renewable resources, especially solar energy, will continue.
According to projections, despite increasing raw material costs, the number of renewable energy facilities is expected to increase by 8% in 2022. About 60% of the expected increase in global renewable energy capacity this year comes from solar energy. It is estimated that a large part of the said increase will be due to large-scale projects carried out in China and the European Union.
Looking forward, the solar industry shares its expectations that solar costs will be cut by half by 2030. For example, there is currently a move toward higher efficiency modules that can generate 1.5 times more power than modules of similar size. This development is expected to have a very positive impact.
In addition, innovations such as product innovations that will reduce the cost of expensive materials such as silver and silicon used in the production of solar panels and double-surface modules that allow the panels to capture solar energy from both sides are announced by the sector and followed carefully.
The developments in floating solar energy systems are also progressing quite rapidly. With this technology, it is estimated that the hydro panels built by Germany on the water will enable the production of approximately 20 GW of solar energy, thus providing electricity to 15 million residences. Floating solar energy technologies, which stand out with their low maintenance and administrative costs, are thought to be preferred, especially in geographies where the amount of land is limited but where water resources such as reservoirs, lakes, ponds, canals and rivers exist.
Especially after Russia's invasion of Ukraine, it has been seen how fragile the food chains are and that this situation may trigger a food crisis in the world. This situation has led countries to search for ways to increase their agricultural productivity. In terms of land use, until recently, creating a solar farm consisting of solar energy panels meant giving up the use of the land for agricultural purposes. However, thanks to technological developments, especially agrivoltaic systems, it has become possible to use the lands for both agriculture and solar paneling, and the first examples can be seen in African countries. This method, which enables to increase the harvest efficiency by using the shadows of the panels and their rainwater collection capacity, is only one of the innovations we will see in the upcoming period.
Another important innovation is expected to occur with the use of digital technologies in order to best integrate solar energy into residences, workplaces and power systems. In this way, it is aimed to make the energy obtained from solar energy more efficient, timely and sustainable.
As a result of such developments, it seems possible to expect that solar energy will reach a cost advantage that will make it unrivaled in many parts of the world compared to fossil fuels. However, as of today, it seems that there is still a long way to go in the context of technological development to obtain more efficiency from solar energy. In fact, it is estimated by the World Economic Forum (WEF) that about 50% of the technologies required to achieve net zero emissions by 2050 are still in development and not available in the market yet. On the other hand, considering that the installation of solar energy is very easy, fast and flexible, it can be said that solar installations will continue to grow in the coming period.
It is extremely critical that these developments are supported by public authorities. Because, in the modeling of the composition of a global energy system with net zero emissions, it is calculated that approximately 70% of the global primary energy demand can be met by solar panels, while the rest can come from wind, biomass, waste, hydroelectric and geothermal. This finding shows us that if the 2050 targets are to be achieved, it will be possible to achieve technologically feasible, cost-effective solar energy by making it accessible in every region around the world.
Although it is accepted by everyone that the rapid growth in solar PV capacity has a great potential to meet the global energy demand, solar energy constitutes a very small amount of global electricity production in the current structure. Therefore, serious hurdles need to be overcome in order to get to the point where it is necessary to meet the 2050 net zero emission commitments.
In this context, one of the most important obstacles is the cost of solar energy projects. As of 2020, the cost of solar energy projects seem to have started to compete with the cost of traditional energy sources, but the point reached by experts is considered insufficient. Although investments in the sector have increased significantly, economic fragilities and economic shocks such as pandemics and wars prevent innovation from occurring sufficiently and rapidly.
Another difficulty with the widespread use of solar energy is that the solar source varies according to the season, time of day, weather, air quality and other similar factors. For this reason, solar energy cannot be shown as the only reliable source in terms of grid security and sustainability by the global energy sector. In order to change this situation, developments in storage technology and network management are needed. At this point, the development of new technologies, especially green hydrogen, is closely followed in the context of digitalization and storage in the sector.
In the current report published by the IEA, in which evaluations of the solar PV supply chain are made, the global solar PV production capacity has shifted from Europe, Japan and the U.S. to China in the last 10 years. According to the latest data, China's share of solar panels in the entire production chain is 80%. Therefore, this situation has made solar PV technology fragile in terms of geopolitical balances. In addition to the finding that the said ratio is expected to increase even more when we consider the impact of Russia on the global markets in terms of natural gas and oil supply, this situation attracts attention as a factor that should be seriously considered.
With an average daily sunshine duration of 7 1/2 hours and solar power plants of different scales in 78 provinces, Türkiye is among the top countries that can benefit from solar energy. Our country with 8.3 GW installed solar energy capacity is expected to exceed 30 GW by 2030 and closely monitors the technological developments in the solar energy sector, and encourages investments made in this field with the policies it implements.
Karapınar Solar Power Plant (GES), which has an investment value of $1 billion (TL 18.2 billion) and will reach full capacity with its 1350 MW installed power by the end of 2022, is promoting an important example in this field. Karapınar GES, which was established in Konya, is Türkiye's largest solar power plant and has the title of Europe's largest solar power plant with its 900 MW panel installed power before it reaches its full capacity. When the aforementioned project is completed, it is expected to provide clean electrical energy to 2 million households and greatly contribute to the green economic transformation.
Undoubtedly, the solar energy potential of Türkiye has great importance within the scope of the works toward the goal of achieving net zero emissions by 2053. When the recommendations from the Climate Council attended by many stakeholders and participants are examined, the intention in this direction is clearly seen. In this context, decisions are taken to prepare the long-term Energy Plan within the framework of the 2053 Net Zero Emission Target, to ensure the maximum use of renewable energy resources, diversify the usage areas and increase the system flexibility for the integration of more renewable energy capacity into the energy system, it is possible to say that serious steps will be taken in the context of energy.
If we add all the aforementioned issues, the result is very important for our country. In the current global conjuncture, as the IEA has pointed out, it's likely that the international climate finance investments in solar energy will be diverted to countries other than China in a significant amount in order to prevent the sector from being geographically concentrated in one place in the upcoming period. When we examine the climate finance investment preferences with the theme of renewable energy on a global scale, it is possible to see that these types of investments generally prefer upper-middle income group countries with a low-risk profile and seek a favorable investment environment. Therefore, it can be said that the investments to be made by donor countries and international financial institutions in solar energy technologies in this field may prefer to benefit from the geographical, physical and meteorological characteristics of Türkiye, as well as the favorable investment environment and the successful experience of previous projects, and thus, a serious investment flow to Türkiye will take place.
On the other hand, due to Russia's occupation of Ukraine, it can be seen that recently highly active actors in the fight against climate change, such as the EU and the U.S., prefer to reduce their dependence on Russian resources to combat climate change by resorting to short-term solutions such as natural gas and coal. On the other hand, it is obvious that the actors in question will sooner or later realize that the fight against climate change is much more important than the conflicts of interest between countries and they will have to give importance to decarbonizing their economies again. In this respect, even if not in the short term, hydrogen will be mentioned more in the medium and long-term parallel to technological developments, especially green hydrogen produced by using renewable energy sources will undoubtedly be of critical importance for emission-intensive sectors. At this point, our country, which resolutely takes steps to use solar energy efficiently and to develop hydrogen technology, will occupy a very important regional position in the fight against climate change with the policies and strategies it will implement in the new period.
