Global solar and wind capacity is on track to double over the next five years and outstrip both coal and gas, after continuing to surge in spite of the economic crisis brought on by the COVID-19 pandemic, the International Energy Agency (IEA) reports in its annual renewable energy update issued this week.
The report foresees wind and solar installations increasing by 1,123 gigawatts (that’s 1,123 billion watts) by 2025, enough to exceed global gas capacity in 2023 and coal in 2024, Carbon Brief reports.
“In sharp contrast to all other fuels, renewables used for generating electricity will grow by almost 7% in 2020,” the Paris-based agency states in the executive summary to the online report. “Global energy demand is set to decline 5%–but long-term contracts, priority access to the grid, and continuous installation of new plants are all underpinning strong growth in renewable electricity.”
That growth “more than compensates for declines in bioenergy for industry and biofuels for transport—mostly the result of lower economic activity,” the IEA adds. “The net result is an overall increase of 1% in renewable energy demand in 2020.”
The report reveals a shift in the IEA’s thinking over a span of just 12 months. “Last year, Carbon Brief analysis of the IEA’s data found that it only expected renewables to overtake coal output over the next five years under its more optimistic ‘accelerated case’ scenario,” the UK-based climate publication states. “However, this year—even in its less ambitious ‘main case’ scenario—wind, solar, hydro, and biomass are projected to take the lead within the next five years,” accounting for 95% of new installed capacity as production costs continue to fall.
Depending on scenario, the IEA sees global solar capacity growing by 130 to 165 GW per year between 2023 and 2025. “Wind is also expected to expand considerably, but its contribution will be smaller than solar,” Carbon Brief says. The increase in capacity will increase actual renewable electricity generation by 50%, pushing it to one-third of global electricity supply and “ending coal’s five decades as the top power provider,” said Executive Director Fatih Birol.
Total renewable generation will hit nearly 9,745 terawatt-hours (TWh), “equivalent to the combined demand of China and the European Union,” the IEA says.
The renewables will be posting those numbers in spite of the headwinds produced by a global health emergency, the agency concludes.
“Renewable power is defying the difficulties caused by the pandemic, showing robust growth while other fuels struggle,” Birol said. “The resilience and positive prospects of the sector are clearly reflected by continued strong appetite from investors.”
Citing the IEA report, The Guardian reports that “shares in renewable equipment makers and project developers have outperformed most major stock market indices,” with the value of solar company shares more than doubling since December 2019. And renewables deployment “could accelerate even faster” if U.S. President-elect Joe Biden gets to implement his $2-trillion climate plan. “If the proposed clean electricity policies of the next U.S. administration are implemented, they could lead to a much more rapid deployment of solar PV and wind,” Birol said.
By contrast, “fossil fuels have had a turbulent time in 2020 as COVID-related measures caused demand from transport and other sectors to plunge.”
But while the economics and even the IEA’s projections are ever in its favour, the transition to renewables is still vulnerable to politics.
“Renewables are resilient to the COVID crisis, but not to policy uncertainties,” Birol noted. “Governments can tackle these issues to help bring about a sustainable recovery and accelerate clean energy transitions.”