The International Energy Agency (IEA) says in a recent report that renewable forms of energy generation are still growing quickly around the world. By 2030, the total capacity is expected to more than double. This high momentum keeps going even if there are still problems with global politics, money, and the supply chain in the sector.
The IEA’s overall positive view is mostly due to better predictions for India, Europe, and most emerging and developing economies compared to what they thought last year.
Policy problems have led to a lower growth forecast.
The IEA has had to lower its prediction for the expansion of global renewable power capacity from 2025 to 2030, even though growth is generally strong. This new prediction is 5% lower than the one from last year. This is mostly because of recent changes in policies, rules, and markets in the US and China, two of the world’s biggest economies.
The prognosis for the United States has been changed a lot, going down by roughly 50%. Several major policy changes, such as the following, are to blame for this precipitous drop:
The federal tax credits will end sooner.
New rules for imports that affect supply chains.
The end of new offshore wind leases.
More rules for allowing onshore wind and solar PV projects on federal land.
The change in China from fixed tariffs to competitive auctions is affecting the economics of projects and decreasing growth prospects as a result.
COP28 Goal Is Not Possible Without Action
The current path is also likely to have an effect on the ambitious goal set at COP28 to triple the world’s renewable energy capacity by 2030.
The IEA research says that by 2030, the world’s renewable power capacity will only be 2.6 times what it was in 2022, which is less than the threefold promise.
Fatih Birol, the IEA’s Executive Director, talked about the problem and offered a possible solution:
“This goal is still possible if countries make better policies to close the gaps in both ambition and implementation.” The accelerated case in this report says that by 2030, global renewable capacity will be 2.8 times what it was in 2022 if countries reduce policy uncertainty, speed up the permitting process, invest more in grid infrastructure, make it easier to integrate variable renewables, and lower the risk of financing.
Good News: India, Europe, and MENA
In a few important areas, the outlook is much better:
India: The country is on track to reach its 2030 goal and will soon be the second-largest market for renewable energy growth in the world. India’s capacity is predicted to grow 2.5 times in five years because there will be more auctions, more funding for rooftop solar projects, and speedier permitting for hydropower projects.
Europe: The prediction for the European Union has been raised a little since there have been more utility-scale solar PV installations than predicted. Strong corporate power purchase agreement (PPA) activity, especially in Germany, Spain, Italy, and Poland, is driving this growth. This is helping to balance a poorer outlook for offshore wind.
Middle East and North Africa (MENA): This region had the highest upgrade, with its prediction raised by 25%. This was due to the rapid expansion of solar PV in nations like Saudi Arabia.
The research also says that solar PV and wind deployment is picking up speed in Southeast Asia, thanks to more ambitious goals and new auctions.
Solar Power’s Rise and Future Problems
The IEA says that solar PV will make up the vast majority of the increase in global renewable capacity.
Fatih Birol, the IEA’s Executive Director, said, “Solar PV is on track to make up about 80% of the world’s renewable capacity growth over the next five years.” He said that solar is going to grow a lot in new places like Saudi Arabia, Pakistan, and a few countries in Southeast Asia.
Birol ended with a caution to policymakers: “As renewables become more important in electricity systems in many countries, they need to pay close attention to the problems with supply chain security and integrating renewables into the grid.”