The global energy crisis has given renewable energy a historic boost, with the world on track to add as much renewable energy in the next five years as it did in the previous twenty.
According to a new report from the IEA, the global energy crisis is causing a sharp acceleration in the installation of renewable energy, with total capacity growth expected to almost double over the next five years, overtaking coal as the primary source of electricity generation in the process and keeping alive the possibility of keeping global warming to 1.5 °C.
Concerns over energy security brought on by Russia’s invasion of Ukraine have prompted nations to rely less on imported fossil fuels, whose prices have skyrocketed, and more on renewable energy sources like solar and wind. According to Renewables 2022, the most recent edition of the IEA’s annual assessment on the industry, the capacity of renewable energy worldwide is now predicted to increase by 2 400 gigawatts (GW) between 2022 and 2027, an amount equivalent to the entire power capacity of China at the time.
This enormous anticipated increase is 30% greater than the growth amount predicted just a year ago, demonstrating how swiftly governments have added more policy weight to renewables. According to the analysis, over 90% of the increase in global electricity over the following five years is expected to come from renewable sources, which are expected to surpass coal as the primary source of electricity worldwide by the beginning of 2025.
“Renewables were already expanding quickly, but the global energy crisis has kicked them into an extraordinary new phase of even faster growth as countries seek to capitalize on their energy security benefits. The world is set to add as much renewable power in the next 5 years as it did in the previous 20 years,” said IEA Executive Director Fatih Birol. “This is a clear example of how the current energy crisis can be a historic turning point towards a cleaner and more secure energy system. Renewables’ continued acceleration is critical to help keep the door open to limiting global warming to 1.5 °C.”
The war in Ukraine represents a turning point for renewable energy in Europe, where businesses and governments want to quickly switch from Russian gas to alternatives. The addition of renewable power capacity in Europe is anticipated to double between 2022 and 2027 compared to the preceding five years, driven by both energy security concerns and climate objectives. If EU member states swiftly implemented a number of policies, such as streamlining and reducing permitting timelines, improving auction designs, and providing better visibility on auction schedules, as well as improving incentive schemes to support rooftop solar, even faster deployment of wind and solar PV could be accomplished.
Beyond Europe, China, the United States, and India are also major contributors to the upward revision in renewable power growth for the upcoming five years. These countries are all putting policies into action and introducing regulatory and market reforms more quickly than originally anticipated to address the energy crisis.
China is anticipated to account for about half of new worldwide renewable power capacity additions over the period of 2022–2027 as a result of its most recent 14th Five-Year Plan. Very ambitious new renewable energy targets, market reforms, and strong provincial government support provide long-term revenue certainty for renewables. China is expected to reach its 2030 target of 1,200 GW of total wind and solar PV capacity five years early.
The US Inflation Reduction Act, however, has given renewable energy development in the US new backing and long-term visibility. Therefore any prediction uncertainties are related to supply chain restrictions, trade restrictions, inadequate grid infrastructure, and lengthy permitting lead times.
In the vast majority of nations around the world, utility-scale solar PV and onshore wind are the least expensive options for new power generation. Global solar PV capacity is anticipated to nearly treble between 2022 and 2027, overtaking coal as the world’s largest source of power capacity. The survey also predicts an increase in the installation of solar panels on rooftops of homes and businesses, which saves consumers money on their energy costs.
Over the anticipated period, the amount of wind energy produced virtually doubles, with one-fifth of that increase coming from offshore projects. It is anticipated that between 2022 and 2027, new onshore wind capacity would reach 570 GW. However, due to lengthy permission processes and a lack of grid infrastructure upgrades, onshore wind additions won’t surpass their previous annual record, set in 2020, until the end of the projection period. Almost the next five years, over 90% of the additional renewable power capacity will come from wind and solar combined.
Global PV supply chains are beginning to show signs of diversification, according to the analysis, and new policies in the US and India are predicted to increase investment in solar manufacturing by up to $25 billion between 2022 and 2027. China continues to be the dominant force, but by 2027, its proportion of global manufacturing capacity might fall from 90% to 75%.
Over the years 2022-2027, the total global demand for biofuel is anticipated to increase by 22%. 80% of the predicted increase in the use of biofuels worldwide is expected to come from the United States, Canada, Brazil, Indonesia, and India, all of which have comprehensive growth-supporting policies.
The paper also presents an expedited scenario in which the capacity of renewable energy sources increases by an additional 25% over the primary forecast. For advanced economies to experience this faster growth, a number of regulatory and permitting issues must be resolved, and the use of renewable electricity in the transportation and heating industries must spread more quickly. It would entail tackling issues with policy and regulatory uncertainty, a shoddy grid infrastructure, and a lack of affordable finance that impede new projects in rising and developing nations.
In order to reliably manage higher shares of variable renewable energy sources, the accelerated case calls for efforts to be made globally to address supply chain concerns, expand networks, and deploy more flexible resources. The world would go closer to a path that would allow it to achieve net zero emissions by 2050, which has an equal chance of keeping global warming to 1.5 °C. This is because renewable energy would expand more quickly under the accelerated case.
Scientists have been warning about the 1.5 °C thresholds for a long time and the need for renewable energy to curb the rising global temperature. Just knowing what will happen if the world exceeds 1.5 °C should have been enough for the world’s governments to take aggressive action years ago. But it took the horrible actions of a dictator in search of world dominance and the suffering of the Ukrainian people just trying to keep their independence to wake up the world governments.
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