IEA Report: Global Energy Crisis Becomes Expansion Booster For Renewables
Paris, France - The energy crisis resulting from the Ukraine war has led to a huge acceleration in renewable energy expansion. The IEA expects global growth to nearly double over the next five years, replacing coal as the largest source of electricity generation. The opportunity to limit global warming to 1.5 degrees thus remains.
Energy crisis may be historic turning point for cleaner, more secure energy system
According to the IEA's annual Renewables 2022 report, energy security concerns triggered by Russia's invasion of Ukraine have prompted countries to turn more to renewable energy. According to the latest edition of its annual report on the RE sector, the IEA's baseline forecast projects a 2,400 gigawatt (GW) increase in global renewable power generation capacity from 2022 to 2027, equivalent to the total power generation capacity of China today.
This large increase is 30 percent higher than the growth forecast a year ago. This shows how quickly governments have added policy weight to renewables, the IEA said. According to the report, renewables will account for more than 90 percent of global power sector expansion over the next five years, overtaking coal as the main source of electricity by early 2025.
"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. 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. The continued acceleration of renewables is critical to keeping the door open to limiting global warming to 1.5 °C, Birol added.
For Europe, the IEA projects that renewable energy capacity additions from 2022 to 2027 will be twice as high as in the previous five-year period, driven by a combination of energy security concerns and climate ambitions. An even faster expansion of wind and solar power could be achieved if EU member states swiftly implemented a number of measures, such as streamlining and shortening permitting timelines and improving tender design and auction schedules.
Beyond Europe, the upward correction in renewable energy growth over the next five years will also be driven by China, the United States, and India, all of which are introducing policies and regulatory and market reforms faster than originally planned to combat the energy crisis.
Solar power generation overtakes coal to become world's most important source of electricity
According to the IEA report, PV systems and onshore wind are the cheapest options for power generation in most countries. Global PV capacity will nearly triple from 2022-2027, surpassing coal and becoming the largest source of power capacity in the world. Global wind power capacity will nearly double over the forecast period, with offshore projects accounting for one-fifth of the growth.
The report sees signs of diversification in global PV supply chains, with new policies in the United States and India expected to boost solar manufacturing investment by up to $25 billion over the 2022-2027 period. China remains the dominant player, but its share of global production capacity could drop from 90 percent today to 75 percent in 2027.
Even faster expansion brings world closer to 1.5 degree target
The report also describes an accelerated case in which renewable energy capacity grows by an additional 25 percent on top of the baseline projection. In advanced economies, this faster growth would require overcoming various regulatory and permitting challenges, as well as faster penetration of renewable electricity in the heat and transport sectors. In emerging and developing economies, policy and regulatory uncertainties, weak grid infrastructure, and lack of access to affordable financing that hinder new projects would need to be addressed. Faster growth of renewables in the accelerated case would move the world closer to a pathway consistent with achieving net-zero emissions by 2050, which offers a higher chance of limiting global warming to 1.5 degrees, the IEA said.
Source: IWR Online, 15 Dec 2022