The global energy crisis has triggered an unprecedented momentum behind renewables, with the world ready to add as much renewable energy in the next 5 years as it has done in the last 20 years.
The global energy crisis leads to a sharp acceleration in renewable energy installations; Total capacity growth worldwide will nearly double over the next five years, surpassing coal as the largest source of electricity generation along the way, and helping to keep the prospect of containment alive. Global warming has risen to 1.5°C, the IEA says in a new report.
Energy security concerns caused by the Russian invasion of Ukraine have motivated countries to increasingly turn to renewable energy sources such as solar and wind to reduce their dependence on imported fossil fuels, whose prices have risen significantly. According to Renewables 2022, the latest edition of the IEA's annual report, global renewable energy capacity is expected to increase by 2,400 gigawatts (GW) over the period 2022-2027; that's an amount equal to all of China's energy capacity today.
This massive expected increase is 30% higher than the amount of growth predicted just a year ago and shows how quickly governments are shifting the additional policy weight to renewable energy sources. The report reveals that renewable energy sources will account for more than 90% of global electricity growth in the next five years and will overtake coal by early 2025 to become the largest global source of electricity.
“Renewables were already expanding rapidly, but as countries sought to reap the benefits of energy security, the global energy crisis has pushed them into an extraordinary new phase of even faster growth. "The world is poised to add as much renewable energy in the next 5 years as it did in the previous 20 years," said Fatih Birol, IEA Executive Director. “This is a clear example of how the current energy crisis can be a historic milestone towards a cleaner and safer energy system. The continued momentum of renewable energy sources is critical to helping keep the door open to limit global warming to 1.5°C. owner."
The war in Ukraine is a defining moment for renewable energy sources in Europe, where governments and businesses want to quickly replace Russian gas with alternatives. The amount of renewable energy capacity added in Europe over 2022-27 is estimated to be twice that of the previous five-year period, combined with energy security concerns and climate targets. Even faster deployment of wind and solar power, streamline and reduce EU member states permitting times, improve tender designs and provide better visibility into tender schedules, as well as support rooftop solar.
Beyond Europe, the upward revision in renewable energy growth for the next five years is being driven by China, the United States and India, all of which are implementing policies and implementing regulatory and market reforms faster than previously planned to tackle the energy crisis. As a result of the recent 14th Five-Year Plan, China is expected to account for almost half of new global renewable energy capacity additions in 2022-2027. Meanwhile, the US Inflation Reduction Act has provided new support and long-term visibility for the expansion of renewable energy sources in the US.
Grid-scale solar and onshore wind are the cheapest options for new electricity generation in a significant majority of countries worldwide. Global solar capacity will nearly triple in 2022-2027, surpassing coal and becoming the world's largest source of power capacity. The report also predicts accelerating solar panel installations on residential and commercial rooftops, helping consumers lower their energy bills. Global wind capacity nearly doubled during the forecast period, with overseas projects accounting for a fifth of the growth. Together, wind and solar will account for more than 90% of the renewable energy capacity added over the next five years.
The report sees signs of diversification in global PV supply chains emerging as new policies in the United States and India are expected to increase investment in solar generation by up to US$25 billion over the period 2022-2027. While China remains the dominant player, its share of global production capacity could fall from 90% today to 75% by 2027.
Total global demand for biofuels is expected to increase by 22% over the period 2022-2027. The US, Canada, Brazil, Indonesia and India account for 80% of the expected global expansion in biofuel use, and all five countries have comprehensive policies to support growth.
The report also reveals an accelerated situation where renewable energy capacity is growing 25% more than the main forecast. This faster growth in advanced economies will require overcoming various regulatory and permitting challenges and a faster penetration of renewable electricity into the heating and transport sectors. It means addressing policy and regulatory uncertainties, weak grid infrastructure, and lack of access to affordable finance that hinder new projects in emerging and emerging economies.
Worldwide, the accelerated case requires efforts to use more flexibility resources to solve supply chain problems, expand networks and securely manage larger shares of variable renewables. The accelerated case of faster renewable energy growth will bring the world closer to a path consistent with reaching net zero emissions by 2050, offering a chance to limit global warming to 1.5°C.
Source: Renewable Energy Growth Accelerating
