GLOBAL ENERGY NEWS

The global energy crisis is pushing the accelerator on renewable energy expansion

Global renewable capacity is expected to increase by almost 75% between 2022 and 2027 in the IEA main-case forecast, equal to the entire installed power capacity of China. Renewables growth is propelled by more ambitious expansion policies in key markets, partly in response to the current energy crisis. This 85% acceleration on the last five years’ expansion rate results primarily from two factors. First, high fossil fuel and electricity prices resulting from the global energy crisis have made renewable power technologies much more economically attractive, and second, Russia’s invasion of Ukraine has caused fossil fuel importers, especially in Europe, to increasingly value the energy security benefits of renewable energy.

This year’s forecast by the International Energy Agency has been revised upwards by almost 30% from last year’s despite energy market turbulence, mainly because China, Europe, the United States and India are implementing existing policies, regulatory and market reforms and new policies more quickly than expected to combat the energy crisis.

For the full IEA executive summary and report please visit the International Energy Agency website.

The global energy crisis has sparked unprecedented momentum for renewables

Renewable capacity expansion in the next five years will be much faster than what was expected just a year ago. Over 2022-2027, renewables are seen growing by almost 2 400 GW in the main IEA forecast. That’s an 85% acceleration from the previous five years, and almost 30% higher than what was forecast in last year’s report, making it the largest ever upward revision. Renewables are set to account for over 90% of global electricity capacity expansion over the forecast period.

Renewables will transform the global power mix through 2027, becoming the largest source of electricity.

Renewables become the largest source of global electricity generation by early 2025, surpassing coal. Their share of the power mix is forecast to increase by 10 percentage points over the forecast period, reaching 38% in 2027. Renewables are the only electricity generation source whose share is expected to grow, with declining shares for coal, natural gas, nuclear and oil generation. Electricity from wind and solar PV more than doubles in the next five years, providing almost 20% of global power generation in 2027. These variable technologies account for 80% of global renewable generation increase over the forecast period, which will require additional sources of power system flexibility.

Solar PV’s installed power capacity is poised to surpass that of coal by 2027, becoming the largest in the world. Cumulative solar PV capacity almost triples in the IEA forecast, growing by almost 1 500 GW over the period, exceeding natural gas by 2026 and coal by 2027. Annual solar PV capacity additions increase every year for the next five years. Despite current higher investment costs due to elevated commodity prices, utility-scale solar PV is the least costly option for new electricity generation in a significant majority of countries worldwide. Distributed solar PV, such as rooftop solar on buildings, is also set for faster growth as a result of higher retail electricity prices and growing policy support to help consumers save money on their energy bills.

Renewable capacity additions reach new record highs through 2027, led by solar PV and wind

Annual renewable capacity additions are forecast to increase continuously over the forecast period, reaching a record 460 GW in 2027 in the main case, 60% higher than last year’s growth. At the end of the forecast period, solar PV and wind provide the vast majority of global renewable capacity additions in 2027, accounting for nearly 95% as technology-specific challenges and limited policy support hamper faster expansion of hydropower, bioenergy, geothermal, CSP and ocean technologies.