Renewable energy is “set to soar” to a record 440 gigawatts of new capacity this year, an eye-popping 107-GW increase over last year, with solar accounting for two-thirds of the total, the International Energy Agency reports in its annual Renewable Energy Market Update released June 1.
The new installations will exceed the total power capacity of Germany and Spain combined, IEA Executive Director Fatih Birol said in a release. In an “accelerated” scenario, new renewables could hit 550 GW (550 billion watts), the IEA projects.
“Solar and wind are leading the rapid expansion of the new global energy economy,” Birol declared. “The global energy crisis has shown renewables are critical for making energy supplies not just cleaner but also more secure and affordable—and governments are responding with efforts to deploy them faster. But achieving stronger growth means addressing some key challenges.”
Those challenges notwithstanding, wind and solar-electric (photovoltaic) panels will supply more than 40% of the electricity this year in Spain, Germany, Ireland, and some other European countries.
The analysis shows China “consolidating its position as the undisputed leader in global deployment,” accounting for 55% of new capacity in 2024, up from 50% in 2022. “By 2024, China will deliver almost 70% of all new offshore wind projects globally, as well as over 60% of onshore wind and 50% of solar PV projects,” the report states. The U.S. renewable energy market is expected to rebound from a tough year in 2022, with 40% growth for both solar and wind and a new record for additional solar capacity.
The IEA says the growth of solar is being spurred by installations large and small, with higher power bills “empowering consumers” in countries like Germany, Italy and the Netherlands to install rooftop systems and cut their energy costs. “Rapid growth in distributed solar PV is the main reason for the more positive outlook, accounting for almost three-quarters of the EU forecast revisions,” the Paris-based agency writes. “This is driven by high electricity prices that make solar PV more financially attractive and by increasing policy support in key EU markets.”
Solar manufacturing capacity is on track to “more than double to 1,000 GW by 2024, led by China and increasing supply diversification in the United States, India, and Europe.” That level of production will be enough to “comfortably meet” annual solar demand in the IEA’s landmark scenario for reaching net-zero emissions by 2050.
New wind capacity will grow 70% over 2022 after a couple of sluggish years, largely due to projects delayed by COVID-19 restrictions in China and supply chain issues in the United States and Europe. But “in contrast to solar PV, wind turbine supply chains are not growing fast enough to match accelerating demand over the medium term. This is mainly due to rising commodity prices and supply chain challenges, which are reducing the profitability of manufacturers.”
The IEA says its renewable energy forecast “has been revised upwards by 40% from before Russia’s invasion of Ukraine, which led many countries to boost solar and wind uptake to reduce their reliance on Russian natural gas.” Carbon Brief Deputy Editor Dr. Simon Evans notes that last week’s projections are “24% more than [the IEA] said just six months ago—and double what it expected in 2020.”
The flurry of new installations saved EU households €100 billion between 2021 and 2023 by replacing pricier fossil fuel generation, the IEA writes. “Wholesale electricity prices in Europe would have been 8% higher in 2022 without the additional renewable capacity,” after factoring in power generation costs from new onshore wind and solar plants that are still 10 to 15% above pre-pandemic levels in most countries outside China.
The report says clean electricity, bioenergy boilers, heat pumps, solar thermal, and geothermal technologies will help Europe displace another eight billion cubic metres (bcm) of natural gas for heating this winter, and 17 bcm next. “This would represent a significant contribution to cover increasing gas demand, should harsher winters and hotter summers occur over the course of 2023-2024.”
But while solar and wind are even more competitive this year than they were in 2022, “government policies need to adapt to changing market conditions, particularly for renewable energy auctions, which were undersubscribed by a record 16% in 2022,” the IEA warns. Countries will need “timely planning and investment in grids in order to securely and cost-effectively integrate high shares of variable renewables in power systems,” and wind would benefit from better policies on permitting and auction design.
