Wind turbines and solar panels in Kayseri, Turkey.
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The world is set to add nearly 290 gigawatts of renewable energy this year, according to the International Energy Agency, with the Paris-based organization expecting “2021 to set an all-time record for new facilities.”
The International Energy Agency’s Renewable Energy Market Report, published on Wednesday, forecast that the planet’s renewable electricity capacity will jump to more than 4,800 gigawatts by 2026, an increase of more than 60% compared to 2020 levels.
Capacity refers to the maximum power that facilities can produce, not necessarily what they generate.
China is set to be the main driver of renewable energy growth in the coming years, according to the International Energy Agency, with Europe, the United States and India at the back.
Looking at the bigger picture, the IEA said that renewables are expected to account for “nearly 95% of the increase in global energy capacity through 2026”.
“We have revised our forecasts compared to the previous year, as support for stronger policies and ambitious climate goals announced for COP26 outpace existing benchmark commodity prices that have increased the costs of building new solar PV and wind facilities,” the report said.
Solar photovoltaic refers to solar photovoltaic energy, which is a method of converting sunlight directly into electricity.
IEA Executive Director Fatih Birol said record additions of renewable electricity in 2021 are “another sign that a new global energy economy is emerging”.
“The rising commodity and energy prices we are seeing today pose new challenges to the renewable energy industry, but higher fossil fuel prices are making renewables more competitive,” Birol said.
While the headline numbers from Wednesday’s report look promising, several headwinds could hit the sector.
The IEA report acknowledged this, noting that renewables face “a range of policy uncertainties and implementation challenges.” These include everything from permitting and financing to network integration and social acceptance.
“The current increases in commodity prices have put upward pressure on investment costs, while the availability of raw materials and higher electricity prices in some markets pose additional challenges for wind and solar PV manufacturers in the short term,” the IEA said.
However, the effects of “fluctuating commodity and transportation prices on demand are expected to be limited,” with rising fossil fuel prices boosting the competitiveness of both solar PV and wind power.
When it comes to net zero goals, the picture is probably more difficult.
While capacity additions for renewables are on track to “grow faster than ever in the next five years,” this will not be enough to meet the IEA’s net-zero emissions scenario by 2050.
Even the IEA’s “accelerated state”, in which governments grapple with regulatory, policy and implementation challenges, will not suffice.
The report said: “Annual capacity growth under the IEA’s net-zero scenario during 2021-2026 should be 80% faster than in our accelerated case, which means that governments need not only to address policy and implementation challenges, but also to increase their ambition. “. .
This pragmatic tone mirrors previous data released by the International Energy Agency. In October, it claimed the continued progress of clean energy “Too slow to put global emissions into a sustained decline toward net zero.”
Indicating the amount of work that needs to be done, the International Energy Agency’s World Energy Outlook described how the “rapid but uneven economic recovery from last year’s Covid recession” has put significant strains on the energy system. This led to a “sharp rise in the prices of natural gas, coal and electricity markets.”
“Despite all the achievements of renewables and electric mobility, the year 2021 sees a significant recovery in the use of coal and oil,” the report continued. “Larly for this reason, it is also experiencing the second largest annual increase in carbon dioxide emissions in history.”