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Energy crisis driving an acceleration in renewables installations – IEA

Rooftop solar

The International Energy Agency’s renewables growth forecast is 30% higher than the amount of growth that was forecast just a year ago

Photo by Creamer Media's Donna Slater

6th December 2022

By: Donna Slater

Features Deputy Editor and Chief Photographer

     

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The global energy crisis is driving an unprecedented acceleration in the installation of renewable power, with total capacity growth worldwide set to almost double in the next five years to reach 2 400 GW by 2027, according to the ‘Renewables 2022’ report published by the International Energy Agency (IEA) on December 6.

The report also finds that renewables are set to account for over 90% of global electricity expansion over the next five years, as well as adding as much renewables in the next five years as it did in the past 20, overtaking coal to become the largest source of global electricity by early 2025.

Energy security concerns caused by Russia’s invasion of Ukraine have motivated countries to increasingly turn to renewables, such as solar photovoltaic (PV) and wind, to reduce reliance on imported fossil fuels, prices of which have spiked dramatically.

The IEA’s renewables growth forecast is 30% higher than the amount of growth that was forecast just a year ago, highlighting how quickly governments have developed additional policy for investing in renewables.

IEA executive director Fatih Birol says renewables installations were expanding quickly before the war in Ukraine, and that the resultant global energy crisis, as countries wean themselves off of Russian gas, has kicked them into an “extraordinary new phase” of even faster growth as countries seek to capitalise on their energy security benefits.

In addition, the IEA forecasts that the amount of renewable power capacity expected to be added in Europe from now until 2027 will be twice as high as in the previous five-year period, driven by a combination of energy security concerns and climate ambitions.

“This is a clear example of how the current energy crisis can be a historic turning point towards a cleaner and more secure energy system. Renewables’ continued acceleration is critical to help keep the door open to limiting global warming to 1.5 oC [above temperatures of the preindustrial era],” he says.

An even faster deployment of wind and solar PV could be achieved if European Union member States were to rapidly implement a number of policies, says the IEA. These include streamlining and reducing permitting timelines, improving auction designs and providing better visibility on auction schedules, as well as improving incentive schemes to support rooftop solar.

Beyond Europe, the IEA has revised upwards its renewable power growth for the next five years in China, the US and India, which are all implementing policies and introducing regulatory and market reforms more quickly than previously planned to combat the energy crisis.

As a result of its recent fourteenth Five-Year Plan, China is expected to account for almost half of new global renewable power capacity additions over the 2022 to 2027 period. Also, the US Inflation Reduction Act has provided new support and long-term visibility for the expansion of renewables in the US.

Meanwhile, the IEA notes that utility-scale solar PV and onshore wind are the cheapest options for new electricity generation in a significant majority of countries, globally, with solar PV capacity set to almost triple over the 2022 to 2027 period.

The report also forecasts an acceleration of installations of solar panels on residential and commercial rooftops, which help consumers reduce energy bills.

The report also suggests global wind capacity will nearly double in the forecast period, with offshore projects expected to account for one-fifth of the growth.

Together, wind and solar will account for over 90% of the renewable power capacity that is added over the next five years.

Furthermore, the report predicts emerging signs of diversification in global PV supply chains, with new policies in the US and India expected to boost investment in solar manufacturing by as much as $25-billion over the 2022 to 2027 period.

While China remains the dominant player, its share in global manufacturing capacity could decrease from its current 90%, to 75% by 2027.

In terms of fuels, the IEA forecasts that total global biofuel demand is set to expand by 22% over the forecast period, with the US, Canada, Brazil, Indonesia and India accounting for 80% of the expected global expansion in biofuel use, with all five countries having comprehensive policies to support growth.

The report also lays out an accelerated case in which renewable power capacity grows a further 25% on top of the main forecast. In advanced economies, this faster growth would require various regulatory and permitting challenges to be tackled and a more rapid implementation of renewable electricity in the heating and transport sectors.

In emerging and developing economies, this would mean addressing policy and regulatory uncertainties, weak grid infrastructure and a lack of access to affordable financing that are hampering new projects, the IEA says.

Globally, 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.

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 oC above preindustrial era levels, the IEA says.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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