World to build fewer wind turbines and solar plants in 2020: IEA

Wind, Solar, Natural gas projects

The world is set to build fewer wind turbines, solar plants and other installations that produce renewable electricity this year because of the impact of the Covid-19 crisis, says IEA.

This will be marking the first annual decline in new additions in 20 years, according to the International Energy Agency.

Growth is expected to resume next year as most of the delayed projects come online and assuming a continuation of supportive government policies.

The world is set to add 167 GW gigawatts (GW) of renewable power capacity this year, 13 percent less than in 2019, according to the IEA’s Renewable Market Update report, which was released today.

The decline reflects possible delays in construction activity due to supply chain disruptions, lockdown measures and social distancing guidelines, as well as emerging financing challenges.

But despite the slowdown in new additions, overall global renewable power capacity still grows by 6 percent in 2020, surpassing the total power capacity of North America and Europe combined.

Next year, renewable power additions are forecast to rebound to the level reached in 2019, with significant support coming from the partial commissioning of two mega hydropower projects in China.

Growth for 2020 and 2021 combined is expected to be 10 percent lower than the IEA had previously forecast before the coronavirus outbreak.

Almost all mature markets are affected by downward revisions, except the United States where investors are rushing to finish projects before tax credits expire. After exceptional growth last year, Europe’s new additions are set to fall by one-third in 2020, their largest annual decline since 1996. A partial recovery is expected next year.

Fatih Birol, executive director of IEA, said: “Countries are continuing to build new wind turbines and solar plants, but at a much slower pace.”

Solar PV accounts for more than half of the forecast expansion in renewable power in 2020 and 2021, but its additions decline from 110 GW in 2019 to over 90 GW in 2020. Large-scale solar PV projects are expected to rebound in 2021, but overall installations are unlikely to surpass 2019 levels. This is because of a significantly slower recovery of distributed solar PV as households and small businesses review investment plans.

Commissioning delays caused by the Covid-19 crisis have slowed the pace of onshore wind installations this year, but they should mostly be compensated for in 2021, as the majority of projects in the pipeline are already financed and under construction.