The world added a record 295 gigawatts (GW) of new renewable power capacity in 2021, overcoming supply chain challenges, construction delays and high raw material prices, said the International Energy Agency (IEA’s) latest Renewable Energy Market Update.
Capacity additions in renewables electricity generation are expected to break another record this year, continuing last year’s trend as governments increasingly seek to avail of renewables for energy security and climate benefits.
Global renewable power additions are expected to reach 320 gigawatts this year, breaking another record despite the continuing supply chain challenges, construction delays and high raw material prices.
Continuing the trend of 2021, renewables’ growth so far this year is much faster than initially expected, driven by strong policy support in China, the EU and Latin America, which are more than compensating for slower than anticipated growth in the US, the IEA said.
The US outlook is clouded by uncertainty over new incentives for wind and solar and by trade actions against solar PV imports from China and Southeast Asia.
However, the current policy settings signal a loss of momentum in renewable power’s global growth next year. Without stronger policies, the new capacity additions in 2023 are expected to plateau.
Solar PV accounts for 60 per cent of global renewable power growth in 2022, followed by wind and hydropower.
China accounted for 46 per cent of worldwide renewable capacity additions although new Chinese capacity declined 2 per cent year on year.
The European Union (EU) was the second-largest market in terms of increased capacity, with the region surpassing for the first time the historic high record in 2011 of 36 GW.
“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,” said IEA Executive Director, Fatih Birol.
The current growth in renewable power capacity would be even faster without the current supply chain and logistical challenges.
“The cost of installing solar PV and wind plants is expected to remain higher than pre-pandemic levels throughout 2022 and 2023 because of elevated commodity and freight prices, reversing a decade of declining costs,” the report said.
However, the agency expects that renewables will remain competitive because natural gas and other fossil fuel prices have risen much faster. Global solar PV additions are forecast to break new records both this year and in 2023, with the annual market reaching a 200-gigawatt threshold next year, supported by growth in China and India.