The International Energy Agency is revising its predictions for renewable energy growth upward by 30 percent, and reckons renewables like wind and solar will overtake coal to become the largest energy source on the planet by 2025.
Renewable investments will account for 90 percent of new global electricity generation over the next five years, the IEA predicts. By 2027, the agency believes the world will add as much renewable power – 2,400GW – as the entire current power capacity of China.
The IEA said two major factors caused it to revise its forecasts upward: Russia’s invasion of Ukraine and resulting European energy worries, and new policies in China, the United States and India it said gives those countries more favorable conditions for renewable investment.
According to the IEA’s Renewables 2022 report, fossil fuel disruptions in the EU have caused energy prices to skyrocket, improving the competitiveness of solar and wind power in those regions.
Due to fears that Russia may further endanger European energy security, the IEA said renewables will double their rate of expansion on the continent in the next five years, though it predicts renewable growth rates will be somewhat slowed by sluggish growth among transportation and heating sectors.
China, the US, and India are all predicted to double their renewable expansion rates over the next five years as well. The IEA said the three will collectively account for two-thirds of global renewable growth, with China alone accounting for nearly half of new global renewable capacity between now and 2027.
The IEA cites China’s 14th Five Year Plan, which was announced late last year, as the basis for a 35 percent upward revision in China’s renewable expansion rate. As Chinese incentives have made utility-scale renewables cheaper than coal electricity, the renewable adoption rate has accelerated to the point where the IEA believes China will reach its 2030 green power goals by 2025.
The US has the Inflation Reduction Act to thank for its upward forecast, which the IEA said has given the US “unprecedented long-term policy visibility for wind and solar projects,” while the agency said solar PV auctions have led to considerable competition in the renewables space.
Will it be enough to meet climate goals?
“The world is set to add as much renewable power in the next 5 years as it did in the previous 20 years,” said IEA executive director Fatih Birol. However, he added, “continued acceleration is critical to help keep the door open to limiting global warming to 1.5°C.”
If the world is going to be able to meet the IEA’s calls for net zero emissions by 2050, renewable investment still needs to increase by an additional 60 percent, the report found. Luckily, the IEA also modeled an accelerated scenario that adds 25 percent more renewable power to its predictions, which it said at the very least “move[s] the world closer to a pathway” to reaching net zero by 2050.
The accelerated case assumes the same scenarios, but with advanced economies taking steps to tackle challenges hampering current rates of growth, like regulatory and permitting issues, and pushing renewable expansion more rapidly into heating and transportation.
For developing countries, the IEA said governments would need to address weak grid infrastructure, a lack of access to affordable financing and addressing policy and regulatory uncertainties. Globally, everyone would be required to address supply chain issues, expand grids and improve energy flexibility.
If those challenges were addressed, an additional 3,000 GW of renewable capacity could be added on top of what’s already been forecasted, the IEA said, but even that’ll still just put us back within reaching distance of goals, not meet them.
“This faster increase would significantly narrow the gap on the amount of renewable electricity growth that is needed,” the IEA said.
Narrow, mind you, not close. ®