The International Energy Agency (IEA) recently revealed in its Renewables 2023 report that the global expansion of renewable energy capacity experienced an astonishing 50 percent surge last year. Solar energy spearheaded this growth, constituting three-quarters of the overall expansion.
China, the world’s second-largest economy, emerged as the front-runner in renewable energy growth. Wind power additions in the country rose by an impressive 65 percent year-on-year. Moreover, China commissioned as much solar photovoltaics (PV) as the entire world did in 2022. This remarkable feat contributed significantly to the global upswing.
Record highs across continents
Noteworthy growth in renewable energy capacity was not limited to China. Europe, the United States. Brazil also witnessed record-breaking highs in renewable energy capacity, underlining the global nature of the renewable energy revolution.
Contrary to the IEA’s previous forecast of 440 gigawatts for 2023, the actual addition stood at nearly 510 gigawatts. The report emphasized that, under existing policies and market conditions, global renewable energy capacity is expected to reach 7,300 gigawatts by 2028. Moreover, solar and wind will account for 95 percent of that expansion.
Renewables surpass coal
Renewables are on track to overtake coal as the largest source of global electricity generation by early 2025, according to the IEA. Despite progress, challenges include the global economic environment and the need for increased financing and deployment in emerging and developing economies.
Hence, the rapid scaling up of financing and deployment of renewables in economies is lagging behind. If states implement policies more swiftly, the world could witness a 21 percent increase in renewable energy capacity compared to the IEA’s baseline projection. This could move the world closer to meeting the global tripling pledge.
Global trends and hurdles
The IEA expects significant growth in deploying solar PV and onshore wind through 2028 in the U.S., EU, India, and Brazil. Moreover, it expects solar module prices to drop further. However, challenges remain for the wind industry due to disruptions in the supply chain, higher costs, and lengthy permitting timelines.
On the other hand, hydrogen projects involving renewables are progressing, which could exponentially increase renewable energy capacity. However, the IEA warns that consistent policies supporting demand are crucial. Of all the projects announced this decade involving the use of renewables to produce hydrogen, only 7 percent is expected to come online by 2030. This indicates the need for faster progress in reaching investment decisions and increased off-taker interest.
Biofuels on the rise
Biofuels, driven by Brazil and India, gained popularity, especially in sectors like air travel. However, the IEA cautioned that deploying biofuels is not happening quickly enough. It expects a substantial increase in demand by 2030 to align with net-zero goals.
In line with the global shift towards renewable energy, the Middle East and North Africa region has significantly contributed to that transition. A report by the Global Energy Monitor revealed that the region has witnessed a 292 gigawatts surge in prospective renewable energy capacity. This marks a 400 percent year-over-year growth since 2022. The report also revealed that over 60 percent of the region’s projects involve green hydrogen production.
Moreover, the report highlighted the significant investments made by ACWA Power, a key player in Saudi Arabia’s energy transition. It also shed light on the contributions of the UAE government-owned renewable firm, Masdar.
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