Sian Crampsie

The uptake of green energy around the world is set to continue growing in 2016 in spite of depressed fossil fuel prices, the Economist Intelligence Unit (EIU) has said.

In its latest industrial outlook for a range of sectors, EIU says that global energy markets are at an "inflection point" as fossil fuel use declines alongside the carbon intensity of the global economy.

The trends will have profound implications for the energy industry, it adds.

EIU states in its report that oil prices will not return to their recent highs "any time soon" and it expects an annual average oil price of $53/barrel. Sluggish energy demand will also continue to impact global oil and gas prices, and some LNG projects mooted for the USA, Canada and Australia will probably be delayed.

However depressed energy prices will not stop the "steady march" of renewables, EIU says. Renewables now account for nearly half of all net additions to electricity capacity worldwide and will again in 2016 take the biggest share. "This is largely due to the lower cost of deploying renewables and the spread of policies aimed at decarbonising the power sector," says EIU in its report. "Together, these factors will overcome the cheapness of competitors to renewables in electricity generation – that is, gas and coal."

EIU reports that there will be substantial renewable energy capacity increases in China and India as well as gains in the USA and several European countries, including Germany.

The electricity sector will be the fastest-growing segment of global energy consumption and therefore will play a crucial role in the decarbonization of the world’s economy, it adds.