IEA reports accelerating growth of solar and wind to become “new normal”.
The International Energy Agency (IEA) has reported that the pandemic may have triggered a lasting acceleration in renewable energy expansion.
Capacity added in 2020 rose by 45% to 280 gigawatts, the fastest increase in new capacity this century and this is set to become the “new normal” as another 270 gigawatts of renewable capacity already on course to be added in 2021 and almost 280 gigawatts in 2022.
The speed of growth will be sustained despite a slowdown in new renewables capacity in China, which was responsible for an exceptional level of additions last year. This means record growth is now largely a result of major renewables investments already underway in the EU and USA while companies have also responded to the economic uncertainty of the pandemic by signing record-levels of power purchase agreements.
IEA executive director Fatih Birol said: “Wind and solar power are giving us more reasons to be optimistic about our climate goals as they break record after record. Last year, the increase in renewable capacity accounted for 90% of the entire global power sector’s expansion.”
The importance of government policies on national renewables projects cannot be understated. Investment in China is diminishing now that government subsidies are phased out. Meanwhile, increasing installation across Europe, the United States, India and Latin America is a result of government support and falling prices for solar PV and wind.
In the United States in particular, high renewable capacity growth this year and next is mainly spurred by the extension of federal tax credits but there may be more to come.
The USA could see an even faster expansion because the IEA forecast has yet to take into account the new administration’s new emissions reduction targets or its as yet unpassed infrastructure bill. If enacted, the bill would drive a much stronger acceleration in the deployment of renewables in and after 2022.
Elsewhere, India’s capacity additions are set to reverse sharply from a decline of almost 50% last year compared with 2019, to strong growth to record national renewable expansion in 2022. This will be driven by the restart of projects paused because of the pandemic, though the current surge in Covid‑19 cases in India may delay them further.