Global renewable energy capacity this year is on track for 4% year-on-year growth to total 198 gigawatts (GW) and will account for 90% of total power capacity additions, a new report by the International Energy Agency said Tuesday.
According to the report Renewables 2020 - Analysis and Forecast to 2025, clean energy power reveals robust growth while other fuels struggle against the COVID-19 pandemic.
The report shows that solar power, as one of the fastest-growing renewable resources, will create 107 GW out of the 198 GW of total net additions this year, with China and the US leading in terms of capacity increases.
Renewable energy capacity will reach 2,888 GW across the world with this growth. Hydropower capacity will rise to 1,324 GW, while solar will increase to 710 GW and wind to 655 GW. The remaining 199 GW of renewable capacity will consist of offshore wind, bioenergy, geothermal and others.
Even stronger growth is to come, the report said. India and the European Union will be the driving forces of a record expansion of global renewable capacity additions of nearly 10% next year, marking the fastest growth since 2015. This is the result of the commissioning of delayed projects where construction and supply chains were disrupted by the pandemic.
Total renewable net capacity additions next year will increase by 218 GW, to total 3,106 GW worldwide, according to the IEA.
"India is expected to be the largest contributor to the renewables upswing in 2021, with the country’s annual additions doubling from 2020," the report said.
"Renewable power is defying the difficulties caused by the pandemic, showing robust growth while others fuels struggle," said Fatih Birol, the IEA executive director.
- Policies to be determinant
Birol, on a positive note, said a continued, strong appetite from investors reflects the resilience and positive prospects of the sector. He said the future "looks even brighter" with new capacity additions on course to set fresh records this year and next.
The IEA reports that although the growth of annual global energy demand is expected to be the greatest at 5% since the Second World War, electricity generated from renewables will be sufficient to cover this demand with a growth forecast globally of 7% this year, underpinned by record new capacity additions.
The Agency advised, however, that given the expiry of renewable incentives in key markets, which is expected to lead to a small decline in renewables capacity additions in 2022, that policymakers take steps to support the strong momentum behind renewables.
"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," the report forecasted.
According to the IEA, critical factors influencing the pace of the deployment will be policy decisions in key markets like China and effective support for rooftop solar photovoltaics (PV), which has been impacted by the crisis as households and businesses reprioritized investments.
With favorable policies, solar PV additions annually could reach a record level of 150 GW by 2022, marking an increase of almost 40% in just 3 years.
"Renewables are resilient to the COVID-19 crisis but not to policy uncertainties," Birol said. Therefore, he recommended that governments tackle these issues to help bring about a sustainable recovery and accelerate clean energy transitions.
Birol, citing the US as an example, noted that if the proposed clean electricity policies of the next US administration are implemented, the country could lead to much more rapid deployment of solar PV and wind, contributing to faster decarbonization of the power sector.
Nonetheless, the IEA expects that renewables outside the electricity sector will not be immune to the effects of the COVID-19 crisis.
Biofuels used in transport are expected to see the first annual decline in the last 20 years, driven by the wider plunge in transport fuel demand this year as well as lower fossil fuel prices reducing the economic attractiveness of biofuels.
- Renewables to end 50 years of coal as top power provider
"In 2025, renewables are set to become the largest source of electricity generation worldwide, ending coal’s five decades as the top power provider," Birol said, adding that by that time renewables are expected to supply one-third of the world's electricity.
Total renewables capacity will be twice the size of the entire power capacity of China today.
The report’s outlook for the next five years forecasts cost reductions and sustained policy support continuing to drive strong growth in renewable power technologies.
Total solar PV and wind capacity is on course to surpass natural gas in 2023 and coal in 2024.
By Gulsen Cagatay, Nuran Erkul Kaya