The International Energy Agency today said it has raised its five-year growth forecast for renewables, thanks to strong policy support in key countries and sharp cost reductions. The IEA’s Medium-Term Renewable Market Report now sees renewables growing 13 per cent more between 2015 and 2021 than it did in last year’s forecast, due to stronger policy backing in the United States, China, India and Mexico, IEA said in a statement.
Over the forecast period, costs are expected to drop by a quarter in solar PV and 15 per cent for onshore wind. Renewables have surpassed coal last year to become the largest source of installed power capacity in the world, it said.
Last year marked a turning point for renewables. Led by wind and solar, renewables represented more than half the new power capacity around the world, reaching a record 153 Gigawatt (GW), 15 per cent more than the previous year. Most of these gains were driven by record-level wind additions of 66 GW and solar PV additions of 49 GW, it said.
About half a million solar panels were installed every day around the world last year. In China, which accounted for about half the wind additions and 40 per cent of all renewable capacity increases, two wind turbines were installed every hour in 2015.
“We are witnessing a transformation of global power markets led by renewables and, as is the case with other fields, the center of gravity for renewable growth is moving to emerging markets,” said Dr Fatih Birol, the IEA’s executive director in the statement.
There are many factors behind this remarkable achievement: more competition, enhanced policy support in key markets, and technology improvements.
While climate change mitigation is a powerful driver for renewables, it is not the only one. In many countries, cutting deadly air pollution and diversifying energy supplies to improve energy security play an equally strong role in growing low-carbon energy sources, especially in emerging Asia.
Over the next five years, renewables will remain the fastest-growing source of electricity generation, with their share growing to 28 per cent in 2021 from 23 per cent in 2015.
Renewables are expected to cover more than 60 per cent of the increase in world electricity generation over the medium term, rapidly closing the gap with coal.
Generation from renewables is expected to exceed 7600 TWh by 2021 — equivalent to the total electricity generation of the United States and the European Union put together today, it said.