The International Energy Agency (IEA) published regular updates indicating what is going on within the energy market all around the globe. Their latest update, published May 2021, is very encouraging. Renewables are ramping up in a big way.
IEA Update Highlights
- In 2020, annual renewable capacity additions increased 45% to almost 280 GW – the highest year-on year increase since 1999.
- Exceptionally high capacity additions become the “new normal” in 2021 and 2022, with renewables accounting for 90% of new power capacity expansion globally.
- Solar PV development will continue to break records, with annual additions reaching 162 GW by 2022 – almost 50% higher than the pre-pandemic level of 2019.
- Global wind capacity additions increased more than 90% in 2020 to reach 114 GW. While the pace of annual market growth slows in 2021 and 2022, it is still 50% higher than the 2017-2019 average.
- Annual growth in the People’s Republic of China’s (hereafter, “China”) renewables market will decelerate following the exceptional expansion that resulted from developers rushing to complete projects before subsidy phase-outs. However, the rest of the world compensates for China’s slowdown and maintains the pace of renewables expansion.
- Europe’s capacity growth accelerates thanks to further policy support and a booming corporate PPA market as PV costs continue to decline.
- The updated forecast for the United States is more optimistic because of federal tax credit extensions. New US emissions reduction targets and the infrastructure bill, if passed, will boost renewables expansion after 2022 (beyond the timeframe of this forecast update).
- Although India’s capacity additions in 2020 declined almost over 50% from 2019, the country is expected to set new records for renewables expansion in 2021 and 2022 as delayed projects from previous competitive auctions are commissioned. However, the current (April 2021) surge in Covid‑19 cases has created short-term forecast uncertainty for this year.
- Transport biofuel production is expected to rebound to 2019 volumes in 2021, after having fallen 8% in 2020. Production is also forecast to expand another 7% in 2022.
- Mainly driven by clean fuel standards and policy support in the US, global Hydrotreated Vegetal Oil (HVO) production capacity is expected to nearly double in the next two years, significantly expanding the capability of producing biofuels from waste and residue feedstocks.
Key Quote by an external observer
The IEA has repeatedly raised its expectations for wind and solar over the past decade, drawing fire from critics that say – in the words of a 2019 Reuters article – that it has “underplay[ed] the speed at which the world could switch renewable sources of energy”.
Carbon Brief
This is a big deal, we really are on a path to getting away from fossil fuels.
The Full IEA Update Report
You can access the full report via here.