Sustainable power installations set for record year: IEA

Wind turbines and solar panels in Kayseri, Turkey.

temizyurek | E + | Getty Images

The world is set to add nearly 290 gigawatts of renewable energy capacity this year, according to the International Energy Agency, with the Paris-based organization expecting 2021 to “set a new record of all time for new installations.”

Published on Wednesday, the IEA’s Renewables Market Report predicts that the planet’s sustainable electricity capacity will jump to more than 4,800 GW by the year 2026, an increase of more than 60% compared to levels in 2020.

Capacity refers to the maximum amount of energy that installations can produce, not what they necessarily generate.

China is set to be the main driver of sustainable capacity growth in the coming years, according to the IEA, with Europe, the US and India following suit.

Looking at the bigger picture, the IEA said that renewable energy is expected for “almost 95% of the increase in global power capacity by 2026.”

“We have changed our forecast from a year earlier,” the report said, “as stronger policy support and ambitious climate targets announced for COP26 rise against the current record of commodity prices that have increased the cost of building new wind and solar PV installations. “

Solar PV refers to photovoltaic solar, a way to convert light from the sun directly into electricity.

The IEA’s executive director, Fatih Birol, said the 2021 record increase in renewable electricity was “another sign that a new global energy economy is emerging.”

“The high commodity and energy prices we are seeing today pose new challenges for the sustainable industry, but increased fossil fuel prices also make renewable energy even more competitive,” said Birol.

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While the headlines of Wednesday’s report seem promising, a lot of headwinds have the potential to push the sector forward.

The IEA report acknowledged this, noting that renewable energy was subject to a “range of policy uncertainties and implementation challenges.” This included issues related to everything from licensing and financing to non-integration and social acceptance.

“The current rise in commodity prices has put increasing pressure on investment costs, while the availability of raw materials and rising electricity prices in some markets present additional challenges for wind and solar PV manufacturers in the short term,” the IEA said.

However, the effects of “volatile commodity prices on demand” were seen as limited, with high prices for fossil fuels further stimulating the competitiveness of both solar PV and wind.

When it comes to non-zero goals, the picture is perhaps even more challenging.

While additions of renewable energy capacity are on track to “grow faster than ever in the next five years”, this would not be enough to meet the IEA’s scenario for net zero emissions in 2050.

Even the IEA’s ‘accelerated case’, in which governments address challenges related to regulation, policy and implementation, would not be enough.

“Annual capacity growth under the IEA Net Zero Scenario in 2021-2026 should be 80% faster than in our accelerated case, which means that governments must not only address policy and implementation challenges, but also increase their ambitions,” the report said.

This sobering tone reflects earlier statements by the IEA. In October, it claimed that the progress of clean energy “remained too slow to set global emissions in sustained decline to net zero.”

In a sign of how much work needs to be done, the IEA’s World Energy Outlook described how a “rapid but uneven economic recovery from last year’s Covid-induced recession had placed significant tensions on the energy system. This had “thrown up sharp price increases in natural gas, coal and electricity markets.”

“For all the progress made by sustainable energy and electric mobility, 2021 sees a major rebound in the use of coal and oil,” the report continued. “Especially for this reason, it also sees the second-largest annual increase in CO2 emissions in history.”

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