Renewable Power Surge: Global Growth Forecast

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International Energy Agency Forecasts Significant Expansion in Global Renewable Power Capacity

Renewable Power Capacity to Surge by One-Third in 2023, Reports IEA

According to a market update from the International Energy Agency (IEA), global additions of renewable power capacity are projected to increase by 33% in 2023. This growth is driven by factors such as rising fossil fuel prices, energy security concerns, and a growing policy push for solar PV and wind power deployment.

The upward trend is expected to continue in 2024, with the world’s total renewable electricity capacity reaching 4,500 GW, equivalent to the combined power output of China and the United States. After experiencing a sluggish period, wind power additions are predicted to rebound in 2023, growing by nearly 70% year-on-year. This surge is attributed to the completion of projects delayed by Covid-19 restrictions and supply chain issues.

However, the IEA cautions that sustained growth in wind capacity in 2024 relies on governments providing greater policy support to address permitting and auction design challenges. Unlike solar PV, the wind turbine supply chain is not expanding quickly enough to meet the accelerating medium-term demand, mainly due to supply chain challenges and rising commodity prices impacting manufacturers’ profitability.

The IEA reveals that global renewable capacity additions are set to increase by 107 GW, surpassing 440 GW in 2023. The United States and India are expected to experience significant growth over the next two years due to new policy measures, while China is projected to account for almost 55% of global renewable power capacity additions in both 2023 and 2024.

Fatih Birol, Executive Director of the IEA, emphasizes the critical role of renewables in making energy supplies cleaner, more secure, and affordable, especially in the face of the global energy crisis.

Solar PV installations are anticipated to contribute to two-thirds of this year’s renewable power capacity increase. The expansion of large-scale solar PV plants is accompanied by the growth of smaller systems, with higher electricity prices driving the rapid expansion of rooftop solar PV.

Furthermore, manufacturing capacity for all segments of solar PV production is expected to more than double to 1,000 GW by 2024, led by China and increased supply diversification in the United States, India, and Europe.

The forecast for the renewable surge in Europe has been revised upward by 40% following Russia’s invasion of Ukraine. This geopolitical event prompted several countries to increase their adoption of solar and wind energy to reduce dependence on Russian natural gas. High electricity prices, particularly in Germany, Italy, and the Netherlands, have also contributed to increased policy support and financial attractiveness for small-scale rooftop solar PV systems.

The IEA highlights that newly installed solar PV and wind capacity has saved European electricity consumers EUR 100 billion ($107 billion) during 2021-2023 by displacing more expensive fossil fuel generation. Furthermore, wholesale electricity prices in Europe would have been 8% higher in 2022 without the additional renewable capacity.

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