By 2023, the IEA expects that total installed wind and solar capacity will exceed that of natural gas and topple coal by the following year. Solar, which the IEA crowned as the new “king of electricity markets” last month, will account for the majority – 60% - of new renewable capacity additions by 2025, effectively double that of wind.
A considerable amount of growth witnessed in renewables this year will occur in China, which expects to see installations soar by around 30% year-on-year as developers rush to qualify projects for incentives before the national policy framework changes next year.
But while such a contraction of policy support in the world’s largest renewables market may have triggered a fall in deployment in years previous, the IEA expects an even stronger 2021 for renewables, with Europe and India coming to the fore. Global renewables capacity additions are expected to increase by 10% in 2021, a new record growth factor and the largest increase since 2015, as projects delayed by the COVID-19 pandemic start to complete and markets with strong renewables pipelines roar back into life.
Of critical importance to this growth is that investor appetite has remained strong in spite of the pandemic. The IEA notes that between January and October this year, auctioned renewable energy capacity was up 15% year-on-year, a factor which will also contribute to capacity additions next year as contracted projects start to come onstream.
However, the IEA has warned of darker clouds on the horizon. While solar deployment could continue to climb in 2022, wider renewables capacity additions are expected to fall somewhat in that year as a result of a looming policy gap. The inference is that while renewables has remained resilient under COVID-19, it is not immune to policy uncertainty.
“Governments can tackle these issues to help bring about a sustainable recovery and accelerate clean energy transitions. In the United States, for instance, if the proposed clean electricity policies of the next US administration are implemented, they could lead to a much more rapid deployment of solar PV and wind, contributing to a faster decarbonisation of the power sector,” Fatih Birol, chief executive at the IEA, said. |