This year, renewable power is growing robustly around the world, contrasting with the sharp declines triggered by the COVID-19 crisis in many other parts of the energy sector, such as oil, gas and coal, according to a recently released report from the International Energy Agency (IEA).
Driven by China and the U.S., new additions of renewable power capacity worldwide will increase to a record level of almost 200 GW this year, the IEA’s Renewables 2020 report forecasts. This rise – representing almost 90% of the total expansion in overall power capacity globally – is led by wind, hydropower and solar PV. Wind and solar additions are set to jump by 30% in both the U.S. and China as developers rush to take advantage of expiring incentives.
Even stronger growth is to come. India and the EU will be the driving forces behind a record expansion of global renewable capacity additions of nearly 10% next year – the fastest growth since 2015 – according to the report. This is the result of the commissioning of delayed projects where construction and supply chains were disrupted by the pandemic, and growth in markets where the pre-COVID project pipeline was robust. India is expected to be the largest contributor to the renewables upswing in 2021, with the country’s annual additions doubling from this year.
“Renewable power is defying the difficulties caused by the pandemic, showing robust growth while other fuels struggle,” says Dr. Fatih Birol, executive director of the IEA. “The resilience and positive prospects of the sector are clearly reflected by continued strong appetite from investors – and the future looks even brighter with new capacity additions on course to set fresh records this year and next.”
Policy makers still need to take steps to support the strong momentum behind renewables. In the IEA report’s main forecast, the expiry of incentives in key markets and the resulting uncertainties lead to a small decline in renewables capacity additions in 2022. But if countries address these policy uncertainties in time, the report estimates that global solar PV and wind additions could each increase by a further 25% in 2022.
Critical factors influencing the pace of deployment will be policy decisions in key markets like China, and effective support for rooftop solar PV, which has been impacted by the crisis as households and businesses reprioritized investments. Under favorable policy conditions, solar PV annual 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 sees cost reductions and sustained policy support continuing to drive strong growth in renewable power technologies. Total wind and solar PV capacity is on course to surpass natural gas in 2023 and coal in 2024. Driven by rapid cost declines, annual offshore wind additions are set to surge, accounting for one-fifth of the total wind market in 2025. The growing capacity will take the amount of renewable electricity produced globally to new heights.
To read IEA’s Renewables 2020 report, click here.