IEA: 2021 set to be a record year for new renewable energy capacity
By the end of the year, a record 290GW of renewable energy generation capacity will have come online, according to the International Energy Agency (IEA). Nonetheless, progress will need to accelerate to deliver a net-zero world.
The IEA has today (1 December) published the 2021 edition of its Renewables Market Report, revealing the progress made this year and updating the Agency’s global forecasts for the coming five years.
According to the report, new renewable capacity additions are set to rise to 290GW by the end of the year. 60% of this total will be accounted for by solar, mainly in China and the US. Wind was the second-largest contributor, and hydropower the third.
In 2020, 199GW of additions were recorded and the IEA forecast 220GW of additions for 2021.
The IEA has stated that the industry has been able to weather the Covid-19 pandemic more robustly than it expected last winter, despite challenges such as supply chain disruption and price hikes for some of the key materials and components used to manufacture solar panels and wind turbines.
Policy changes made by nations in the lead-up to COP26 – and at the climate summit in Glasgow in November – are cited as a key supporting factor for clean energy sectors. The report points to, as examples, China’s pledge to host 1,200GW of wind and solar capacity by 2030; the EU’s ‘Fit for 55’ plan to slash emissions by 55% by 2030, and India’s vision to host 500GW of renewable energy capacity by 2030.
“This year’s record renewable electricity additions of 290GW are yet another sign that a new global energy economy is emerging,” said the IEA’s executive director Fatih Birol.
Looking ahead to the next five years, this year’s edition of the Report is far more bullish than last year’s. It forecasts that the world will host 4,800GW of renewable energy generation capacity by 2026 – equivalent to more than the current global capacity for fossil fuels and nuclear combined.
Fossil fuels and nuclear, it forecasts, will account for just 5% of global capacity additions in the next five years. At least half of the additions will be accounted for by solar.
All in all, renewable energy capacity additions for 2021 – 2026 are likely to be 50% higher than in 2015 – 2020.
The IEA has stated that, as well as the growing global net-zero movement (targets now cover 90% of GDP, by some recent estimates), governments and the private sector are favouring renewables due to falling technology costs and the ongoing gas price crisis.
Birol added: “The high commodity and energy prices we are seeing today pose new challenges for the renewable industry, but elevated fossil fuel prices also make renewables even more competitive.”
A truly global transition?
A word of caution, however. The IEA is warning that capacity additions post-2026 will need to accelerate even more rapidly if the world is to get on track for the Agency’s own net-zero by 2050 scenario. That scenario was first published this spring, documenting more than 4,000
Moreover, the capacity additions forecast through to 2026 are not evenly distributed. 80% of the additions will be accounted for by the US, China, India and the EU. A previous IEA analysis revealed that developing nations accounted for just one-fifth of global energy investment between 2016 and 2016. Investment, the Agency warned, will need to increase sevenfold by the end of the decade to deliver a just net-zero transition.
In related news, a solar infrastructure fund aiming to raise £500m for subsidy-free solar projects in the UK has today received a commitment of up to £250m from the UK's National Infrastructure Bank (UKIB).
NextEnergy Capital is overseeing the fund, which has a ten-year term. It claims that the funding could double the capacity of subsidy-free solar projects in the UK from 1GW to 2GW.
UKIB has this week agreed to invest up to £250m, half of the fund’s total target fund size, on a match-funding basis with the private sector.
“As this is the first deal for the UK Infrastructure Bank to leverage private sector investment, it is an important milestone for us," said UKIB chief executive John Flint.
“I am delighted that the Bank is able to play a role in the development of subsidy-free solar energy for the UK.”