Stockholm (NordSIP) – The goal of tripling global renewable energy capacity by 2030 that was agreed at COP28 appears to be well within reach, according to the International Energy Agency’s (IEA) Renewables 2023 report, released today January 11, 2024.
Speaking at the launch of the report in Paris attended by NordSIP, IEA Executive Director Fatih Birol said: “When I look at the numbers it is definitely a ‘wow’ effect. Last year we see that the renewables capacity expansion in the entire world was over 500 gigawatts, which is equal to the entire current power capacity of Germany, France, and Spain put together. This represents a 50% increase compared to 2022, a historical jump.” Birol goes on to point out that while record levels of new renewables capacity were implemented in the United States, Europe and Brazil, by far the primary driver of this latest leap forward is China. The overall picture under current governmental policies points to a global renewable energy capacity 2.5 higher by 2030, and Birol believes one of the keys to achieving the remaining shortfall lies in addressing the necessary investment in developing countries.
China’s dominant role in the growth of renewables is evident in the IEA figures. It commissioned as much new solar capacity as the rest of the world in 2022. Solar Photovoltaic (PV) is the main technology driving the growth in renewables, although wind power is also a significant contributor. China’s capacity in the latter grew by 66% in the same period. The IEA expects the country to reach its 2030 targets for wind and solar during this year and is well on track to deliver half of its national energy generation via renewables within the next few years.
The West must keep pace with China
According to Birol, governments in the Western world must step up their action to support the achievement of the COP28 commitment. The IEA urges them to address policy uncertainties and improve the speed of their adaptation to macroeconomic changes. Other crucial recommendations include greater investment in outdated Western national energy grids to accommodate the faster expansion of renewables and work to eliminate some of the persistent administrative barriers to entry for new power generation providers. The IEA report highlights a growing supply glut in solar PV, with prices falling sharply but remaining obstacles in the way of the deployment of the technology at national, commercial and domestic levels. Finally, the IEA believes that wealthy nations must urgently support investment in renewable projects in the developing world, where countries struggle to obtain suitable financing on their own terms. Taken together, Birol is confident that these measures would enable the COP28 target to be met on time.
The report also highlights the difficulties faced by the wind generation industry outside of China, where it is flourishing. The less favourable macroeconomic environment and administrative challenges faced by wind generation projects in Europe and North America have led to a lowering of forecasts for this sector by the IEA. Some major projects in the UK and North America have been cancelled due to increased expected costs. These problems are especially evident in offshore wind projects.
Potential role of biofuels and green hydrogen is overstated
The renewable energy sources examined in the report also include biofuels and green hydrogen. The IEA remains sceptical of the latter, pointing to a large discrepancy between announced hydrogen plans and the actual pace of development. China, Saudi Arabia and the United States are behind 75% of the planned production by 2028, but no more than 7% of this is so far expected to be genuinely implemented. Biofuels are popular with emerging nations, led by Brazil, which accounts for 40% of the total planned expansion by 2028. However, the IEA does not believe biofuels will make any significant contribution the global energy mix needed in a 2050 net-zero scenario.
Despite the remaining obstacles and challenges, the IEA is forecasting several significant positive milestones to be reached in the next five years. It expects wind and solar PV to exceed global hydropower generation during the course of this year and overtake nuclear by 2026. Renewables should supersede coal as the world’s largest source of electrical power by next year, and account for 42% of global electricity generation by 2028.
