Unease over energy security and the global energy crisis is driving a sharp acceleration in installations of renewable power, with total capacity growth worldwide set to almost double in the next five years, overtaking coal as the largest source of electricity generation along the way, the International Energy Agency (IEA) has said in a new report.
Energy security concerns caused by Russia’s invasion of Ukraine have motivated countries to increasingly turn to renewables such as solar and wind to reduce reliance on imported fossil fuels, whose prices have spiked dramatically. Global renewable power capacity is now expected to grow by 2,400 gigawatts (GW) over the 2022 to 2027 period, an amount equal to the entire power capacity of China today, according to ‘Renewables 2022‘, the latest edition of the IEA’s annual report on the sector.
This massive expected increase is 30 per cent higher than the amount of growth that was forecast just a year ago, highlighting how quickly governments have thrown additional policy weight behind renewables. The report finds that renewables are set to account for over 90 per cent of global electricity expansion over the next five years, overtaking coal to become the largest source of global 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 five years as it did in the previous 20,” said IEA Executive Director Fatih Birol. “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 °C.”
The report also lays out an accelerated case in which renewable power capacity grows a further 25 per cent 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 penetration of renewable electricity in the heating and transport sectors. In emerging and developing economies, it would mean addressing policy and regulatory uncertainties, weak grid infrastructure and a lack of access to affordable financing that are hampering new projects.
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. 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.
However, David Wilson, CEO of energy modelling company Energy Exemplar, cautioned that this would be far from an easy transition: “It is not simply a case of turning a switch on. Transmission networks and related infrastructure will need major upgrades to cope with new sources of energy and storage, and that is coupled with the trend for the electrification of society. Countries will need to have energy sources connected to their grids that have not been explored before and to an extent previously unseen, while permitting regimes will need to be overhauled. This requires time and investment into understanding the implications of this.
“It should be noted that the IEA’s predictions come with caveats, showing that its accelerated renewables scenario will expand by an additional 25 per cent by 2027 – only if countries address policy, regulatory, permitting and financing challenges to improve infrastructure. Without addressing these fundamental issues, I fear the IEA forecast may only be ambitions.”