Article Republished By Javier Troconis
Renewables are set for yet another year of record growth in 2022, with some 320GW of new capacity expected to be added around the world this year as governments take advantage of the climate and energy security benefits of solar and wind power, according to the International Energy Agency (IEA).
The latest renewable energy market update from the influential organisation reveals the world added a record 295GW of new renewable power capacity in 2021, despite clean energy sectors facing higher material costs, construction delays and supply chain bottlenecks in the wake of disruption caused by the Covid-19 crisis. Annual additions of renewable power in the EU alone jumped by almost 30 per cent to a record 36GW in 2021, it said.
And next year the IEA expects global renewables capacity additions to be be even greater, thanks in particular to strong policy support for clean energy in the likes of China, the European Union and Latin America which it said would “more than compensate” for slower-than-anticipated growth in the US.
However, the IEA also warned that renewable power’s growth is on track to lose momentum in 2023, predicting that global additions to the clean power fleet will plateau as solar power’s continued acceleration is offset by “little change” in wind additions and a 40 per cent decline in hydropower expansion.
As such, the energy authority has said the outlook for renewables for 2023 and beyond would depend “to a large extent” on policies introduced over the next six months by national governments.
Fatih Birol, executive director of the IEA, welcomed growing political consensus of the role renewable energy could play in shoring up energy security during fractious times, but urged governments to step up their activities in this area.
“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,” he said. “Cutting red tape, accelerating permitting and providing the right incentives for faster deployment of renewables are some of the most important actions governments can take to address today’s energy security and market challenges, while keeping alive the possibility of reaching our international climate goals”.
It comes amid fraught geopolitical risks surrounding energy in the wake of Russia’s invasion of Ukraine this year, while soaring energy costs and supply chain issues have prompted warnings of significant economic headwinds, with even a recession on the cards in the UK.
The report today claims the EU pipeline of renewables for 2022 and 2023 has the potential to “significantly reduce” the bloc’s dependence on Russian gas for electricity. But it warns that efforts to ramp up clean power needed to happen in tandem with energy efficiency measures that kept energy demand in check.
The IEA predicted the cost of installing solar PV and wind farms are expected to remain higher than pre-pandemic levels throughout this year and next due to elevated commodity and freight prices, reversing more than a decade of declining costs. But it notes clean energy projects continue to be cheaper to build than fossil fuel power plants, because prices for fossil gas and other fossil fuel alternatives have risen faster.
Elsewhere, the report stresses that solar power is driving the growth of global renewable pipeline, predicting it will account for some 60 per cent of new renewable power additions in 2022. It also predicts the solar market is on track to hit the 200GW mark in 2023, as large-scale projects multiply in China and India and households and companies in Europe are tap rooftop solar panels to shield themselves from expensive wholesale electricity prices.
With regards to wind power, the IEA predicts China will unseat Europe as the world’s leading offshore wind market by the end of this year. It is forecasting an 80 per cent jump in offshore wind additions this year compared to 2020, despite additional offshore wind capacity being on track to drop 40 per cent between 2021 and 2022 after a Chinese subsidy programme came to a close. Onshore wind capacity additions are also predicted to recover “slightly” this year, after plunging 32 per cent in 2021, the IEA said.