Global renewable power capacity growth is on track to nearly double in the next five years, overtaking coal as the largest source of electricity generation, the International Energy Agency (IEA) said.
Renewable power capacity is expected to grow by 2,400 gigawatts by 2027, equivalent to the current power capacity of China, the world’s second-largest economy, the IEA said in its Renewable 2022 report.
“Renewables were already expanding quickly, but the global energy crisis has kicked them into an extraordinary new phase of even faster growth as countries seek to capitalise on their energy security benefits,” said Fatih Birol, IEA executive director.
“This is a clear example of how the current energy crisis can be a historic turning point towards a cleaner and more secure future world energy system.”
Energy security concerns caused by Russia’s invasion of Ukraine have encouraged countries to turn increasingly to renewables such as solar and wind to reduce reliance on imported fossil fuels, whose prices have surged dramatically.
Renewables are set to account for more than 90 per cent of global electricity expansion over the next five years, mostly driven by Europe, the Paris-based agency said.
Global solar PV capacity is set to almost triple between now and 2027, becoming the largest source of power capacity in the world. Wind capacity is expected to double in the same period, with offshore projects accounting for one fifth of the growth.
Europe is currently in its worst energy crisis after Russia, the continent’s biggest energy exporter, slashed its exports of natural gas in response to wide-ranging EU sanctions.
A faster spread of wind and solar PV could be achieved if EU member states “rapidly” introduce a number of policies, including streamlining and reducing permitting timelines, improving auction designs and providing greater visibility on auction schedules, the IEA said.
China, which has the world’s largest installed solar capacity, is expected to account for almost half of new global renewable power capacity additions over the next five years.
The US Inflation Reduction Act, which has offered tax incentives for wind, solar and other renewables, has provided “new support” and “long-term visibility” for the expansion of such energy in the country, the agency said.
Investment in solar manufacturing will receive a $25 billion boost, thanks to new policies in the US and India, the IEA said.
China’s share in global solar panel manufacturing capacity could fall to 75 per cent by 2027, from 90 per cent currently, the agency added.
The IEA has also laid out an “accelerated case” in which renewable power capacity grows 25 per cent higher than the current forecast.
Faster growth would require regulatory and permitting challenges to be tackled in advanced economies, along with a more “rapid” penetration of renewables in the heating and transport sectors, the agency said.
Emerging and developing economies need to address policy and regulatory uncertainties, weak grid infrastructure and a lack of access to affordable financing that are hampering new projects, the IEA added.
“Worldwide, the accelerated case requires efforts to resolve supply chain issues, expand grids and deploy more flexibility resources to securely manage larger shares of variable renewables,” said the agency.
“The accelerated case’s faster renewables growth would move the world closer to a pathway consistent with reaching net zero emissions by 2050, which offers an even chance of limiting global warming to 1.5 °C.”