Installations of renewable power capacity worldwide are set to almost double in the next five years, overtaking coal as the largest source of electricity generation, the IEA says in a new report released today.
Energy security concerns caused by Russia’s invasion of Ukraine have motivated countries to 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 2022-2027 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.
Renewables are set to account for over 90 percent of electricity expansion over the next five years, overtaking coal to become the largest source of global electricity by early 2025.
“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. “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.”
The amount of renewable power capacity added in Europe in the 2022-27 period is forecast to 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 deployment of wind and solar PV could be achieved if EU member states were to rapidly implement a number of policies, including 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.
The upward revision in renewable power growth for the next five years is also driven by China, the United States and India, which are all implementing policies and introducing regulatory and market reforms more quickly.
As a result of its recent 14th Five-Year Plan, China is expected to account for almost half of new global renewable power capacity additions over the 2022-2027 period. Meanwhile, the US Inflation Reduction Act has provided new support and long-term visibility for the expansion of renewables in the United States.
Utility-scale solar PV and onshore wind are the cheapest options for new electricity generation in a significant majority of countries worldwide. Global solar PV capacity is set to almost triple over the 2022-2027 period, surpassing coal and becoming the largest source of power capacity.
Global wind capacity almost doubles in the forecast period, with offshore projects accounting for one-fifth of the growth. Together, wind and solar will account for over 90 percent of the renewable power capacity that is added over the next five years.
Emerging signs of diversification in global PV supply chains, with new policies in the United States and India are expected to boost investment in solar manufacturing by as much as USD 25 billion over the 2022-2027 period. While China remains the dominant player, its share in global manufacturing capacity could decrease from 90 percent today to 75 percent by 2027.
Total global biofuel demand is set to expand by 22 percent over the 2022-2027 period. The United States, Canada, Brazil, Indonesia and India make up 80 percent of the expected global expansion in biofuel use, with all five countries having comprehensive policies to support growth.