New additions of renewable-energy capacity worldwide will increase to a record level of almost 200 GW this year, shrugging off the demand slump that accompanied the Covid-19 crisis and which negatively affected the demand for fossil fuels.
In addition, a new International Energy Agency (IEA) report points to an even stronger growth trajectory for the coming five years, underpinned by ongoing cost reductions and sustained policy support. The IEA, critics caution, has historically underestimated the growth of renewables and overestimated the role of fossil fuels and nuclear.
The ‘Renewables 2020’ report shows that the strong renewables showing during the year is being driven by China and the US, where wind and solar additions are poised to rise by 30% as developers rush to take advantage of expiring incentives.
The authors forecasts that solar photovoltaic (PV), wind and hydropower will account for almost 90% of the total expansion in overall power capacity globally in the year.
Electricity generated by renewable technologies will increase by 7% globally, despite a 5% drop in global energy demand, the largest since the Second World War.
The IEA says even stronger growth will follow, with India and the European Union to emerge as driving forces behind a record expansion of global renewable capacity additions of nearly 10% in 2021 – the fastest growth since 2015.
India is expected to be the largest contributor to the renewables upswing in 2021, with the country’s annual additions doubling from 2020.
However, should the clean-energy policies proposed by America’s President-elect, Joe Biden, be implemented, the IEA says there could be a much more rapid deployment of solar PV and wind in that country.
The outlook for 2022, the IEA says, is being weighed down by expiry of incentives in key markets, which could result in a modest decline in renewables capacity additions during the year.
However, the authors argue that global solar PV and wind additions could each increase by a further 25% in 2022 should these policy uncertainties be resolved.
Under favourable policy conditions, solar PV annual additions could reach a record level of 150 GW by 2022, representing an increase of almost 40% in just three years.
“Renewable power is defying the difficulties caused by the pandemic, showing robust growth while other fuels struggle,” IEA executive director Dr Fatih Birol says, noting that this resilience is reflected by continued strong appetite from investors.
“Renewables are resilient to the Covid crisis but not to policy uncertainties,” Birol says. “Governments can tackle these issues to help bring about a sustainable recovery and accelerate clean energy transitions.”
The report also forecast that total wind and solar PV capacity is on course to surpass natural gas in 2023 and coal in 2024 and that, in 2025, renewables will become the largest source of electricity generation worldwide, ending coal’s five decades of leadership.
By that time, renewables are expected to supply one-third of the world’s electricity, with a total capacity twice the size of China’s current power capacity.