IEA forecasts global renewable energy capacity to nearly double in five years
The total capacity of renewable energy facilities will nearly double in the next five years, overtaking coal as the largest source of electricity generation. So says the International Energy Agency (IEA) in its new report ‘Renewables 2022’. Global renewable energy capacity is forecast to increase by 2,400 GW over the period 2022-2027. The IEA stresses that the world is poised to add as much renewable energy in the next five years as it did in the previous 20 years.
This massive increase in renewables forecast is 30% higher than the growth that was predicted just a year ago. The report reveals that renewables will account for more than 90% of global electricity expansion over the next five years, overtaking coal to become the world’s largest source of electricity by early 2025.
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The IEA’s ‘Renewables 2022’ report highlights that the global energy crisis is driving a sharp acceleration in renewable energy installations. Energy security concerns caused by the Russian invasion of Ukraine have prompted countries to increasingly turn to renewables, such as solar and wind, to reduce dependence on imported fossil fuels whose prices have skyrocketed dramatically.
Rise of renewable energies in Europe
The amount of renewable energy capacity added in Europe in the 2022-2027 period is forecast to double from the previous five-year period, driven by energy security concerns and climate ambitions.
The report highlights that even faster deployment of wind and solar PV could be achieved if EU member states quickly implemented a number of policies, including simplifying and reducing permitting timelines, improving auction designs and improving the visibility of auction schedules, as well as improving incentive schemes for solar rooftops.
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Renewables also on the rise in China, US and India
Beyond Europe, the upward revision in renewable energy growth for the next five years is also driven by China, the US and India, which are implementing policies and introducing regulatory and market reforms faster than expected to combat the energy crisis.
Notably, as a result of its recent 14th Five-Year Plan, China is expected to account for nearly half of new global renewable energy capacity additions during the 2022-2027 period. For its part, the U.S. Inflation Reduction Act has offered new long-term support and visibility for renewable energy expansion in the United States.
Photovoltaics to triple, onshore wind to double
The IEA report identifies large-scale solar PV and onshore wind as the cheapest options for new electricity generation in a large majority of countries around the world.
Global solar PV capacity will nearly triple during the 2022-2027 period, overtaking coal and becoming the world’s largest source of power capacity. The report also forecasts an acceleration in residential and commercial rooftop solar panel installations, which help consumers reduce energy bills.
Global wind capacity, meanwhile, will nearly double over the forecast period, with offshore projects accounting for one-fifth of the growth. Together, wind and solar will account for more than 90% of the renewable energy capacity to be added over the next five years.
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The report sees emerging signs of diversification in global PV supply chains, with new policies in the United States and India expected to boost investment in solar manufacturing by as much as $25 billion over the 2022-2027 period. According to IEA forecasts, although China remains the dominant player, its share of global manufacturing capacity could decline from 90% today to 75% by 2027.
