This year, renewable energy is growing robustly around the world, in contrast to the sharp declines sparked by the COVID-19 crisis in many other parts of the energy sector such as oil, gas and coal. This emerges from a recently published report by the International Energy Agency (IEA).
Driven by China and the US, global additions to renewable energy capacity will soar to a record level of nearly 200 GW this year, predicts the IEA 2020 Renewable Energy Report, which is nearly 90% of the total global expansion in electricity capacity attributed to wind, hydropower and solar PV. Wind and solar additions are expected to increase by 30% in both the US and China as developers want to take advantage of the expiring incentives.
Even stronger growth will come. India and the EU will be the driving forces behind a record global renewable capacity expansion of nearly 10% next year, the fastest growth since 2015, the result of the commissioning of delayed projects involving construction and supply chains, according to the report disrupted by the pandemic and growth in markets where the pipeline was robust prior to the COVID project. India is projected to be the largest contributor to the renewable energy boom in 2021, with the country’s annual growth doubling from this year.
“Renewable energies are defying the difficulties caused by the pandemic and showing robust growth while other fuels struggle,” says Dr. Fatih Birol, managing director of the IEA. “The resilience and positive outlook for the sector is clearly reflected in the continued strong investor appetite – and the future looks even better as new capacity is added to set new records this year and next.”
Policy makers still need to take steps to support the strong momentum behind renewables. In the main forecast of the IEA report, the expiry of incentives in key markets and the resulting uncertainties will result in a slight decline in renewable energy capacity expansions in 2022. However, if countries address these political uncertainties in good time, the report estimates that global solar PV and wind supplements occurring could each increase by an additional 25% in 2022.
Critical factors influencing the pace of deployment include policy decisions in key markets like China and effective rooftop support for solar PV, which has been hit by the crisis as households and businesses re-prioritized investment. Under favorable political conditions, annual solar PV additions could reach a record level of 150 GW by 2022 – an increase of almost 40% in just three years.
The report’s outlook for the next five years envisages cost reductions and continued political support that will continue to fuel the strong growth in renewable energy technologies. Total wind and solar PV capacity is well on the way to outperform natural gas in 2023 and coal in 2024. Due to the rapid decline in costs, annual offshore wind inflows are expected to increase and account for a fifth of the total wind market in 2025. The growth Capacity will take the amount of renewable electricity produced worldwide to a new level.
Click here to read the IEA Renewable Energy 2020 report.