Renewable energy growth is accelerating faster than ever before

The growth of the world’s capacity to generate electricity from solar panels, wind turbines, and other renewable technologies is expected to accelerate in the coming years, with 2021 expected to set a new all-time high for new installations, according to a new report from the International Energy Agency.

Despite rising costs for key materials used to manufacture solar panels and wind turbines, new renewable power capacity additions this year are expected to reach 290 gigatonnes (GW) in 2021, exceeding the previous all-time high set last year, according to the latest edition of the IEA’s annual Renewables Market Report.

Global renewable electricity capacity is expected to increase by more than 60% from 2020 levels by 2026, reaching over 4 800 GW – similar to the present total global power capacity of fossil fuels and nuclear combined. Renewables are expected to account for about 95 percent of the increase in global power capacity until 2026, with solar PV accounting for more than half of it. The amount of renewable capacity added from 2021 to 2026 is estimated to be 50% more than from 2015 to 2020. This is due to increased government policy backing and more ambitious renewable energy objectives stated prior to and during the COP26 Climate Change Conference.

“This year’s record renewable power additions of 290 gigatonnes are yet another indicator of the emergence of a new global energy economy,” said IEA Executive Director Fatih Birol. “Today’s high commodity and energy costs offer new problems for the renewable business, but higher fossil fuel prices make renewables even more competitive.”

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Renewables are expected to expand faster in all areas compared to the 2015-2020 timeframe. China continues to be the world leader in terms of capacity increases, with 1200 GW of total wind and solar capacity planned in 2026 – four years earlier than its current objective of 2030. India is expected to lead the way in terms of growth rate, more than tripling new installations between 2015 and 2020. Deployments throughout Europe and the United States are also expected to accelerate dramatically over the next five years. These four markets contribute for 80 percent of global renewable capacity additions.

“The rise of renewables in India is amazing,” said Dr. Birol, “supporting the government’s newly declared target of attaining 500 GW of renewable power capacity by 2030 and showcasing India’s greater potential to expedite its clean energy transition.” “China continues to exhibit its clean energy strengths, with the rise of renewables indicating that the country may possibly reach a peak in CO2 emissions far before 2030.”

Solar PV continues to be the engine of renewable electricity development, with capacity additions expected to expand by 17% in 2021 to a new high of about 160 GW. During the same time period, onshore wind increases are expected to be about a fourth greater on average than in the 2015-20 timeframe. By 2026, total offshore wind power is expected to more than treble.

The IEA analysis predicts that this historic rise in renewables will occur despite today’s high commodity and transportation prices. However, if commodity prices continue high until the end of next year, the cost of wind projects will return to levels last seen in 2015, wiping out three years of cost reductions for solar PV.

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Despite rising costs stifling growth, worldwide biofuel demand is expected to exceed 2019 levels in 2021, reversing last year’s massive fall caused by the epidemic. Demand for biofuels is expected to rise sharply through 2026, with Asia accounting for about 30 percent of additional output. India is predicted to overtake the United States and Brazil to become the world’s third largest ethanol market.

Governments may speed renewables growth even further by tackling critical constraints such as licensing and grid integration concerns, societal acceptability issues, inconsistent regulatory approaches, and insufficient payment. High finance expenses in the poor nations are another big impediment. In the report’s accelerated scenario, which assumes that some of these roadblocks are removed, average annual renewable capacity additions are one-quarter larger in the period through 2026 than in the main case.

Even still, even quicker deployment would fall well short of what would be required for a worldwide road to net zero emissions by mid-century. This would necessitate renewable power capacity additions at nearly double the rate of the report’s main case throughout the period 2021-26. It would also mean four times the rise in biofuels demand and almost three times the growth in renewable heat demand.

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