Key countries around the world are set to add as much new renewable energy capacity over the next five years as they did over the last 20, as governments look for affordable supplies that can address the overwhelming energy security issues raised by Russia’s war in Ukraine, the International Energy Agency (IEA) says in its Renewables 2022 report released Tuesday.
Renewables will increase by 2,400 gigawatts (2.4 billion watts), equal to all the installed capacity in China today, and 90% of new power generation over the next five years will be renewable, the Paris-based agency says in the executive summary of the report. That’s 30% more than the IEA’s prediction just a year ago, prompting what the executive summary calls “our largest ever upward revision.”
Carbon Brief says the IEA’s growth forecast has itself grown 76% in the last two years.
“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,” IEA Executive Director Fatih Birol said in a release. “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.”
While the stunning increase in renewable energy production still doesn’t put countries on track to bring energy systems to net-zero by 2050, the report says they could “significantly narrow the gap” and add another 25% to the next five years of rapid expansion by addressing the policy, regulatory, permitting, and financing issues the industry faces.
“This faster increase would significantly narrow the gap on the amount of renewable electricity growth that is needed in a pathway to net-zero emissions by 2050,” the executive summary states.
“Fossil fuel supply disruptions have underlined the energy security benefits of domestically generated renewable electricity, leading many countries to strengthen policies supporting renewables,” the executive summary states. “Meanwhile, higher fossil fuel prices worldwide have improved the competitiveness of solar PV (photovoltaics, or solar-electric cells) and wind generation against other fuels.”
The IEA modelling shows renewable energy surpassing coal as the world’s largest source of electricity in 2025, and solar alone exceeding coal by 2027. “Utility-scale solar PV and onshore wind are the cheapest options for new electricity generation in a significant majority of countries worldwide,” the release says. Global solar photovoltaic capacity will almost triple over the next five years, to more than 2,350 GW, and wind capacity will almost double, to 570 GW, with offshore wind development accelerating but onshore installations slowed down by long permitting procedures and grid bottlenecks.
In 2027, renewables will account for 38% of total power generation, with wind and solar PV accounting for 80% of the increase and more than doubling their own share, to nearly 20% of total demand — a trend that will in turn drive the need for more flexibility in electricity systems.
“Renewables are the only electricity generation source whose share is expected to grow, with declining shares for coal, natural gas, nuclear, and oil generation,” the IEA writes. “The growth of dispatchable renewables including hydropower, bioenergy, geothermal, and concentrated solar power remains limited despite their critical role in integrating wind and solar PV into global electricity systems.”
The analysis identifies China and the European Union, followed by the United States and India, as the main countries driving the trend. All four double the pace of their renewable energy expansion over the next five years, with the effort in Europe driven by a combination of energy security and climate concerns.
The IEA still calls for policy improvements in Europe to “drastically increase” the pace of change and address “sluggish” growth in transportation and space heating and cooling, while encouraging the U.S. and India to develop their domestic manufacturing capacity for photovoltaic systems.
The agency expects a 100-fold increase over the next five years in renewable energy capacity devoted to green hydrogen production, with China, Australia, Chile, and the United States accounting for about two-thirds of the total. The U.S., Canada, Brazil, Indonesia, and China lead “robust” growth in biofuel production, with waste and residues providing feedstock to cover one-third of the growth.
Analysts and observers praised the main findings of the report in prepared statements, while encouraging governments and financial institutions to shift their policies accordingly.
In a “new energy security age,” said Lisa Fischer, programme leader at the E3G climate consultancy, “counting on fossil fuel sources is no longer an adequate energy security management approach—instead, managing down your demand for fossil fuels is what will give you a more secure energy system.”
But EU energy ministers “are still dragging their feet over a new commitment to having 45% of the EU energy mix to come from renewables by 2030,” added E3G programme leader Pieter de Pous, when 45% should be the “absolute minimum for new EU ambition”.
Europe Beyond Coal campaigner Duygu Kutlay agreed that “energy ministers are discussing watered-down renewable energy targets that will inevitably lead to more waste. Committing to 50% renewable and 20% energy efficiency targets is essential to put the EU on track to solving energy affordability and security, while living up to our commitment to climate action.”
Kiko Network Japan spokesperson Evan Gach said the IEA “has once again highlighted that renewable energy is the best path to a decarbonized society for Japan and throughout the world. Japan cannot rely on unproven, immature ‘innovative technologies’ like ammonia co-firing or CCS to meet its climate targets, but renewables are affordable, clean, secure, and are available right now.”
David Hayman, campaign director at London-based Make My Money Matter, warned that “the UK’s high street banks remain in a dangerous relationship with the fossil fuel industry,” with the five biggest — HSBC, Barclays, Santander, NatWest, and Lloyds — handing the sector US$368 billion in new investment over the last five years. (In Canada, HSBC is in the process of merging with the country’s biggest fossil fuel investor, the Royal Bank of Canada.)
“These investments are bad for people, bad for the planet, and go against the values of millions of UK bank account holders,” Hayman said. “That’s why it’s time for the UK’s biggest banks to end this dangerous relationship, stop financing fossil fuel expansion, and urgently increase their lending towards renewable energy. Failure to do so not only threatens our climate—but our national security, too.”