According to the Paris based International Energy Agency’s (IEA) Renewable Energy Market Update, the world added a record 295 gigawatts (GW) of new renewable power capacity in 2021. New capacity for generating electricity from renewables such as solar, wind, and other clean energy increased by 6% despite having to overcome pandemic-driven supply chain challenges, construction delays and higher prices for raw materials.
In the European Union alone, annual renewable power additions jumped by almost 30% to 36 gigawatts in 2021 which finally exceeded the bloc’s previous record of 35 gigawatts set a decade ago.
The IEA expects clean energy to continue to grow further in 2022 as governments seek to take advantage of renewables’ energy security and climate benefits more and more.
It is anticipated that global capacity additions will rise by 25 GW this year to 320 GW. This is equivalent to an amount that would come close to meeting the entire electricity demand of Germany or matching the European Union’s total electricity generation from natural gas.
Solar PV is on track to account for 60% of global renewable power growth in 2022, followed by wind and hydropower. Global additions of solar PV capacity are on course to break new records this year and next. Solar’s growth in China and India is accelerating due to strong policy support for large-scale projects which can be completed at lower costs than fossil fuel alternatives.
COMPARE PRICES FROM LOCAL INSTALLERS
Compare prices from local companies fast & free
Europe’s renewable capacity is set to grow more in 2022 and 2023, as Brussels aims to launch a “European Solar Rooftops Initiative” to help cut gas-fuelled power and heating in domestic and commercial buildings and move away from Russian fossil fuels.
The IEA’s report indicates that fast renewables growth is being boosted by strong policy support in China, the European Union, and Latin America. Renewables growth is still forecast to increase by 8% despite slower than anticipated growth in the United States.
Russia’s invasion of Ukraine has helped to create an unprecedented global energy crisis. Governments in many countries are trying to find ways to help consumers with the higher energy prices as well as reduce dependence on Russian energy supplies. This has naturally resulted in policies being proposed that accelerate the transition to clean energy technologies. Notably wind and solar PV have the potential to reduce the European Union’s power sector dependence on Russia by 2023.
The current global energy crisis has served to highlight the key role of renewable energy and added new urgency to accelerate clean energy transitions. Renewable energy can reduce prices and dependence on fossil fuels both in the short and the long term.
It looks promising that the additional renewables capacity commissioned for 2022 and 2023 will significantly reduce the European Union’s dependence on Russian gas in the power sector. However, the increased renewables capacity needs to go hand in hand with energy efficiency measures to keep the region’s energy demand in check, for this to work.
IEA Executive Director Fatih Birol said:
“Energy market developments in recent months, especially in Europe, have proven once again the essential role of renewables in improving energy security, in addition to their well-established effectiveness at reducing emissions. Cutting red tape, accelerating permitting and providing the right incentives for faster deployment of renewables are some of the most important actions governments can take to address today’s energy security and market challenges, while keeping alive the possibility of reaching our international climate goals.”
Even though costs for new solar PV and wind installations have increased due to elevated commodity and freight prices, natural gas, oil and coal prices have risen much faster making renewable electricity more competitive than ever. The rise in the prices of solar PV and wind installations has reversed a decade-long cost reduction trend and they are expected to remain higher in 2022 and 2023. The current growth in renewable power capacity would be even faster if it wasn’t for the present supply chain and logistical challenges.
Uncertainty around policy as well as long and complicated permitting regulations have prevented much faster growth for the wind industry. After falling by 32% in 2021 after especially high installations in 2020, additions of new onshore wind capacity are expected to recover slightly this year and next.
Based on the policies we have in place today; renewable energy’s global growth looks likely to lose momentum in 2023. Without stronger policies the amount of renewable power capacity is expected to plateau as continued progress for solar is offset by a 40% decline in hydropower expansion and little change in wind additions.
The outlook for renewables in 2023 and beyond will very much depend on whether new and stronger policies are introduced and implemented over the next few months.