The International Energy Agency (IEA) increased its forecast for global renewable energy deployment this decade by two-thirds in a major report released earlier this week.
“WOW,” Carbon Brief Deputy Editor and Senior Policy Editor Simon Evans wrote in a LinkedIn post after the IEA released [pdf] its Renewables 2024 report. “Just nine months ago, in January 2024, its Renewables 2023 report forecast 3,200 gigawatts of capacity—mainly wind and solar—would be built around the world during the five years 2024-2028. Now, in Renewables 2024, it’s significantly increased that forecast, to 3,700 GW over the same five years—and a massive 5,500 GW by 2030.”
That means the Paris-based IEA “is now forecasting two-thirds more renewable capacity being built than just two years ago.”
That total translates into a 2.7-fold increase in global renewables capacity through 2030, with renewable growths expected to exceed government targets by nearly 25% thanks to supportive policies in around 140 countries and favourable economic conditions. The IEA says installed capacity will still fall short of the COP28 climate summit goal of tripling total capacity to 11,000 GW by 2030. However, that target is still “entirely possible” if governments make bold plans in their formal commitments under the Paris agreement, set to be announced next year, and work together to lower financing costs in developing regions like Africa and Southeast Asia, where renewable growth is being held back.
“The world’s renewable power capacity is expected to surge over the rest of this decade,” the IEA wrote in a release. Globally, additions are on course to equal the current capacity of China, the European Union, India, and the United States combined.
“Renewables are moving faster than national governments can set targets for,” IEA Executive Director Fatih Birol said. “This is mainly driven not just by efforts to lower emissions or boost energy security—it’s increasingly because renewables today offer the cheapest option to add new power plants in almost all countries around the world.”
By 2030, renewables are expected to meet half of global electricity demand, Birol added.
China, Solar Photovoltaics Lead The Way
China is projected to dominate renewables growth, accounting for 60% of global capacity expansion, the IEA says. “The country is forecast to be home to every other megawatt of all renewable energy capacity installed worldwide in 2030,” surpassing its goal of 1,200 GW for solar PV and wind energy six years early.
Globally, solar will be the top performer, making up 80% of the growth in renewables out to 2030. “Adoption accelerates due to declining costs, shorter permitting timelines, and widespread social acceptance,” writes the IEA. (The IEA’s confidence here runs counter to warnings about the harm that community pushback is doing to renewable fortunes—Ed.)
The agency further predicts a growth of distributed applications among residential and commercial consumers “as more households and companies seek to reduce their electricity bills.”
Key Players: U.S., EU, India
The IEA sees renewables growth continuing in the United States largely due to tax credits available through the Biden-Harris administration’s Inflation Reduction Act, while competitive auctions and corporate power purchase agreements will drive expansion in the EU.
Europe’s 600-GW solar PV ambition for 2030 is within reach, “but more effort is needed for wind,” writes the IEA. Globally, wind is projected to double its rate of expansion between now and 2030, compared to the period between 2017 and 2023.
Meanwhile, India is set to be “the fastest growing renewable energy market among large economies” due to a rapid expansion of auctions, a new support scheme for rooftop PV, and stronger financial indicators for utility companies.
Among other renewables, hydropower is expected to “remain steady,” while bioenergy, geothermal, concentrated solar power, and ocean energy are expected to decline due to a lack of policy support.
Hydrogen remains “a negligible driver” out to 2030, supplying only 43 GW of new capacity, less than 1% of total global renewable energy expansion—mostly due to “insufficient demand creation,” the IEA says.
Capacity Challenges
The IEA urges countries to announce more ambitious plans in their next Nationally Determined Contributions under the 2015 Paris deal, writing that only 14 countries had explicit renewable capacity targets before COP28.
Efforts must also address the chokepoints renewables projects face, like lengthy timelines for permits, grid connection wait times, and high financing costs, especially in emerging and developing markets.
At least 1,650 GW of renewable capacity is in advanced stages of development and waiting for a grid connection, says the IEA. That is 150 GW more than last year, but grid connection times are slowly improving.
“Queues to integrate energy storage are also significant as deployment rises,” the IEA warns. Higher curtailments are another concern, as renewables capacity meets a grid not ready to welcome it.
“In Chile, Ireland, and the UK, the curtailment of wind and solar PV recently reached between 5% and 15%,” writes the IEA. “Despite growing investment in battery storage in many of these markets, further flexibility measures, including long-term storage and large-scale demand-response, will be necessary.” This applies to Chile, where solar and wind penetration will be close to 70% by 2030, as well as Portugal, the Netherlands, and Germany.
The IEA also suggests establishing criteria beyond “just price” when awarding renewable power capacity. This “new tool” aims to avoid direct trade measures, with nearly 60% of all capacity awarded in auctions worldwide now including non-price criteria such as sustainability and supply chain security. While this may lead to higher short-term prices, it can promote system optimization and support domestic socio-economic goals.
Sustainable transportation fuels are crucial for meeting international climate goals, the IEA writes, but their growth is lagging due to higher costs compared to fossil fuels, keeping their share of global energy below 6% by 2030.
