New capacity for generating electricity from renewable power increased to a record level worldwide in 2021 and will grow further this year as governments increasingly seek to take advantage of renewables’ energy security and climate benefits, according to the International Energy Agency.
The world added a record 295 gigawatts of new renewable power capacity in 2021, overcoming supply chain challenges, construction delays, and high raw material prices, according to the IEA’s latest Renewable Energy Market Update. Global capacity additions are expected to rise this year to 320 gigawatts – equivalent to an amount that would come close to meeting the entire electricity demand of Germany or matching the European Union’s total electricity generation from natural gas. Solar PV is on course to account for 60 per cent of global renewable power growth in 2022, followed by wind and hydropower.
In the European Union, annual additions jumped by almost 30 per cent to 36 gigawatts in 2021, finally exceeding the bloc’s previous record of 35 gigawatts set a decade ago. The additional renewable capacity commissioned for 2022 and 2023 has the potential to significantly reduce the European Union’s dependence on Russian gas in the power sector. However, the actual contribution will depend on the success of parallel energy efficiency measures to keep the region’s energy demand in check.
“Energy market developments in recent months – especially in Europe – have proven once again the essential role of renewables in improving energy security, in addition to their well-established effectiveness at reducing emissions,” said IEA Executive Director Fatih Birol. “Cutting red tape, accelerating permitting, and providing the right incentives for faster deployment of renewables are some of the most important actions governments can take to address today’s energy security and market challenges while keeping alive the possibility of reaching our international climate goals.”
Renewables’ growth so far this year is much faster than initially expected, driven by strong policy support in China, the European Union, and Latin America, which are more than compensating for slower than anticipated growth in the United States. The US outlook is clouded by uncertainty over new incentives for wind and solar and by trade actions against solar PV imports from China and Southeast Asia.
Based on today’s policy settings, however, renewable power’s global growth is set to lose momentum next year. In the absence of stronger policies, the amount of renewable power capacity added worldwide is expected to plateau in 2023, as continued progress for solar is offset by a 40 per cent decline in hydropower expansion and little change in wind additions.
While energy markets face a wide range of uncertainties, the strengthened focus by governments on energy security and affordability – particularly in Europe – is building new momentum behind efforts to accelerate the deployment of energy efficiency solutions and renewable energy technologies. The outlook for renewables for 2023 and beyond will therefore depend to a large extent on whether new and stronger policies are introduced and implemented over the next six months.
