In a report, the IEA said renewable energy capacity additions are expected to rise this year to 320 gigawatts, which would equate to an amount that would come close to meeting Germany’s entire electricity demand. or the European Union’s total electricity production from natural gas.
The world added a record 295 GW of new renewable energy capacity – to generate electricity from solar, wind and other renewables – in 2021, overcoming supply chain challenges. supply, construction delays and high commodity prices, according to the IEA’s latest renewable energy market update.
Solar PV will account for 60% of global renewable energy growth in 2022, followed by wind and hydropower.
In the European Union, annual additions jumped nearly 30% to 36 GW in 2021, surpassing the previous block record of 35 GW set a decade ago.
The additional renewable energy capacity commissioned for 2022 and 2023 has the potential to significantly reduce the European Union’s dependence on Russian gas in the electricity sector. The actual contribution will depend on the success of parallel energy efficiency measures to control the region’s energy demand, the IEA said.
Growth in renewables this year is much faster than initially expected, driven by strong political support in China, the European Union and Latin America, which more than offsets slower-than-expected growth in the United States.
The U.S. outlook is clouded by uncertainty surrounding new wind and solar incentives and trade actions against solar PV panel imports from China and Southeast Asia. However, based on current policy parameters, global renewable energy growth is expected to slow next year.
The amount of renewable energy capacity added is expected to plateau in 2023 as continued advances in solar power are offset by a 40% decline in hydropower expansion and little change in wind power additions . As energy markets face a wide range of uncertainties, governments’ increased focus on energy security and affordability – particularly in Europe – is giving new impetus to efforts to accelerate deployment energy efficiency solutions and renewable energy technologies.
The outlook for renewables for 2023 and beyond will therefore depend to a large extent on the introduction and implementation of new and stronger policies over the next six months. The current growth in renewable energy capacity would be even faster without the current supply chain and logistical challenges.
The cost of installing solar PV and wind power plants is expected to remain higher than pre-pandemic levels throughout 2022 and 2023 due to high commodity and freight prices, reversing a decade of falling costs. However, they remain competitive because the prices of natural gas and other fossil fuels have risen much faster.
Global solar PV capacity additions are on track to break new records this year and next, with the annual market reaching 200 GW in 2023. Solar growth in China and India is accelerating, driven by strong support policy to large-scale projects, which can be done more cheaply than alternatives to fossil fuels.
In the European Union, solar installations on the roofs of households and businesses are expected to help consumers save money as electricity bills rise. Political uncertainties, as well as lengthy and complex permit regulations, prevent much faster growth of the wind industry. New onshore wind capacity fell 32% in 2021 after exceptionally high installations in 2020. New onshore wind capacity is expected to recover slightly this year and next.
New offshore wind capacity additions will drop 40% globally in 2022 after a huge jump in China as developers rushed to meet a subsidy deadline. Global additions will be more than 80% higher this year than in 2020.
China will overtake Europe at the end of 2022 to become the market with the largest total offshore wind capacity in the world.
Demand for biofuels recovered in 2021 from its pandemic lows to more than 155 billion liters, close to 2019 levels. Demand is expected to continue to grow – by 5% in 2022 and 3% in 2023. However, the impacts of Russia’s invasion of Ukraine contributed to a 20% downward revision to our previous forecast for biofuel growth in 2022.