The International Energy Agency has published the latest edition of its Medium-Term Renewable Market Report, in which it has increased its projections for renewable energy capacity additions by 13% between 2015 and 2021.
Published on Tuesday, the International Energy Agency’s (IEA) Medium-Term Renewable Market Report examines the future of renewable energy as the global economy transitions towards a low-carbon model, leaving behind the carbon-intensive economy that has landed humanity in this situation in the first place. The new report looks at how renewable energy is used in the power, heat, and transportation sectors, and how its use will continue to evolve over the next five years in the face of lower fossil fuel prices.
Of particular importance to the IEA is the continued downward trend that renewable energy costs are experiencing and strong policy support for renewable energy development in some companies. As a result, not only did renewable energy capacity installation surpass coal in 2015 to become the world’s largest source of installed power capacity in the world, but the IEA has high hopes for the future, and increased its projections for capacity expansion by 13% over its projections from last year.
“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.
The IEA reports that annual renewable electricity capacity reached 153 GW in 2015, thanks to massive additions from onshore wind (63 GW) and solar PV (49 GW). The authors of the report were quick to highlight the continued cost reductions in renewable energy generation, with record-low long-term remuneration prices ranging from $30 MWh to $50 MWh for both onshore wind and solar PV. Further, the report pointed to recent tender results in Europe for large-scale offshore wind projects which indicate potential cost reductions in the range of 40% to 50%. Onshore wind generation costs are also expected to decrease a further 15% on average by 2021, while utility-scale solar PV costs are expected to decrease by around 25%.
Overall, the IEA projects global renewable electricity capacity is expected to grow by 42%, or around 825 GW by 2021, up 13% on the IEA’s projections put forward in 2015.
Renewable energy’s share of electricity generation will grow from 23% in 2015 to 28% in 2021, cover more than 60% of the increase in world electricity generation over the medium term, and generate in excess of 7600 TWh by 2021.
“I am pleased to see that last year was one of records for renewables and that our projections for growth over the next five years are more optimistic,” added Dr. Birol. “However, even these higher expectations remain modest compared with the huge untapped potential of renewables. The IEA will be working with governments around the world to maximize the deployment of renewables in coming years.”
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