World Set to Add ‘Record-Breaking’ Renewables to Electricity Systems: New IEA Report
A new report from the International Energy Agency (IEA) shows that renewable power capacity additions are set to rise by a third globally this year, with wind and solar photovoltaic (PV) leading the way.
Prompted by the worldwide energy crisis, it will be the largest yearly increase ever.
According to the report, concerns about energy security and increased fossil fuel prices have driven strong wind power and solar PV deployment.
“Solar and wind are leading the rapid expansion of the new global energy economy. This year, the world is set to add a record-breaking amount of renewables to electricity systems – more than the total power capacity of Germany and Spain combined,” said IEA Executive Director Fatih Birol in a press release from the IEA.
The striking growth is predicted to continue into 2024, with total global renewable electricity capacity soaring to 4,500 gigawatts (GW) — the equivalent of the combined total power production of China and the U.S., the report said.
Additions to global renewable energy capacity are poised to increase by 107 GW, the biggest absolute rise in history, and are expected to reach more than 440 GW this year.
Europe has placed renewables at the head of the continent’s response to the energy crisis, and new policies in India and the U.S. are helping to propel marked growth there that is expected to continue for the next two years.
This year and next, China is expected to be responsible for nearly 55 percent of the additions to renewable energy capacity worldwide.
“The global energy crisis has shown renewables are critical for making energy supplies not just cleaner but also more secure and affordable – and governments are responding with efforts to deploy them faster,” Birol said in the press release.
According to the report, two-thirds of the renewable power capacity increase this year will be due to additions of solar PV, and that expansion is expected to continue in 2024. Smaller PV systems are growing, while large-scale solar PV plants continue to expand. Rooftop solar PV is being stimulated by rising electricity prices, allowing consumers to cut energy costs.
Solar PV manufacturing capacity is predicted to increase by more than two times to 1,000 GW next year, with China leading the way, and helped by growing diversification of supply in Europe, India and the U.S.
Because of that movement, there will be ample solar PV manufacturing capacity globally in 2030 to meet the yearly demand for the Net Zero Emissions by 2050 Scenario set forth by the IEA.
In 2023, additions to wind power are expected to grow by nearly 70 percent annually, following lagging growth for a couple of years. This is principally due to project completions in China that had been put off by Covid-19 restrictions, as well as supply chain issues in the U.S. and Europe.
The growth of wind turbine supply chains is not fast enough to meet rising demand, primarily due to challenges with the supply chains themselves, as well as increasing commodity prices, which are lowering manufacturers’ profitability. More expansion next year will rely upon whether governments are able to provide increased policy support to tackle auction design and permitting challenges.
“[A]chieving stronger growth means addressing some key challenges. Policies need to adapt to changing market conditions, and we need to upgrade and expand power grids to ensure we can take full advantage of solar and wind’s huge potential,” Birol said in the press release.
From 2021 to 2023, EU power consumers are estimated to have saved 100 billion euros with wind capacity and newly installed solar PV, the report said. In Europe, prices for wholesale electricity would have risen by eight percent last year without increased renewables capacity.
Expectations for European additions of renewable energy capacity have risen by 40 percent from prior to Russia’s invasion of Ukraine, as many countries increased their uptake of wind and solar in order to lower their dependency on natural gas from Russia.
Small-scale rooftop solar has become more financially appealing as electricity prices have soared and policy support has increased in major European markets, primarily in Italy, the Netherlands and Germany.
The report added that governmental policies need to be adjusted to account for changing market conditions, especially when it comes to auctions of renewable energy, which saw a record 16 percent in undersubscriptions last year.
Policies must also concentrate on investment in and timely planning of grids.
The report added that by next year several European countries, including Ireland, Spain and Germany, will see their combined share of solar PVs and wind rise to make up more than 40 percent of their yearly total electricity generation.