IEA significantly increases renewables forecast
Having previously been accused of "holding back the global energy transition" through "misleading" outlooks for the growth of clean energy, the International Energy Association (IEA) has today (25 October) increased its five-year growth forecast for renewables.
The latest edition of the IEA’s Medium-Term Renewable Market Report anticipates a 13% growth in renewable energy uptake over the next six years compared to last year’s version of the report. The IEA cites stronger policy environments in the US, China, India and Mexico as the main driver in renewables deployment.
“We are witnessing a transformation of global power markets led by renewables and, as is the case with other fields, the center of gravity for renewable growth is moving to emerging markets,” IEA’s executive director Dr Fatih Birol said.
“I am pleased to see that last year was one of records for renewables and that our projections for growth over the next five years are more optimistic. However, even these higher expectations remain modest compared with the huge untapped potential of renewables. The IEA will be working with governments around the world to maximize the deployment of renewables in coming years.”
Alongside strong political support in some of the world’s largest economies, the uptake in renewables looks set to be boosted by tumbling installation costs. According to the report, by 2021 the cost of solar photovoltaics and onshore wind are expected to fall by 25% and 15% respectively.
The report noted that last year marked a “turning point” for renewables. Renewables surpassed coal to become the largest source of installed power capacity globally to reach 153 GW – a 15% increase on the year prior.
Wind and solar were the two sources that drove this change. Solar PV accounted for 66 GW, with around 500,000 solar panels installed every day, while onshore and offshore wind capacity reach 49 GW. Wind capacity epitomised the ongoing renewables transition in China, where the country accounted for around 50% of all new wind installations.
According to the report, more competition, enhance policy support and technology advancements all contributed to the uptake. For the next five years, the report expects the renewable share of electricity generation to grow from 23% to 28%.
Grounds for caution
Despite the positive outlook, the report does warn that there are still “grounds for caution”. Political uncertainty – excluding those cited in the report – is still stalling the pace of investments across the globe, while the costs of financing remains a prevalent issue in the developing world. The report also notes that the uptake of renewables is still being handicapped by slow growth in the heat and transport sectors – an impact currently being felt in the UK.
The IEA report also identifies a number of market frameworks that would boost renewable capacity by almost 30% in the next five years, creating an annual market capacity of around 200GW by 2020. According to the IEA, this accelerated effort would put the world on a “firmer path to meeting long-term climate goals”.
The modified prediction on anticipated growth from the IEA is a welcome change from previous reports published by the organisation. Annual World Energy Outlooks from the IEA have often been criticised for underestimating the growth of renewables, being labelled as “misleading” and “irresponsible” in the process.
The expected growth in renewables also arrives at a key time in the global battle to combat climate change. Earlier today it was revealed that CO2 levels in the atmosphere had again breached the 400 parts per million benchmark and would likely remain above the threshold for the rest of the year.
Once the threshold has been passed – which originally occurred in June this year – the carbon takes longer to be removed by natural processes, making emission reductions more complex as a result.
The IEA report was also launched on the same day that a new paper from the Overseas Development Institute (ODI), CAFOD and Christian Aid highlighted how cleaner energy sources could displace coal in providing energy access for those in extreme poverty.
The Beyond Coal: Scaling up clean energy to fight poverty’ report suggests that the coal industry’s claims that ramping up coal-fired power plants as a means to fighting extreme poverty and improve energy access in developing countries is “given too much credit”.
The paper instead suggests that building just one-third of the planned coal-fired stations globally would push the world beyond the 2C global warming limit, subsequently pushing “hundreds of millions” into extreme poverty.
The sharp decline in solar and wind costs that the IEA outlines is also reflected in this report, with it claiming that distributed renewables are the “cheapest and quickest” way to provide electricity to poor households.
The report recommends that governments phase out all support for coal, instead pooling the money to support “sustainable and modern energy”. G20 Governments should also stop all forms of fossil fuel subsidies while developing economies should introduce plans for an energy shift that delivers against the recently-ratified Paris Agreement and the Sustainable Development Goals.
Figures from Bloomberg New Energy Finance (BNEF) have suggest that emissions from the global power sector will be 5% higher in 2040, with an additional $5.3trn needed in investment into zero-carbon energy to prevent CO2 levels surpassing the 'safe' limit of 450 parts per million, as previously set out by the Intergovernmental Panel on Climate Change.