IEA: World 'comfortably' on track for renewables target

The IEA predicts that renewable electricity capacity worldwide will reach 4,500 gigawatts (GW) by next year, equivalent to the entire combined power output of China and the United States.

Global additions of renewable capacity will surpass 440 GW in 2023, 24 percent more than it predicted six months ago — and double what it expected in 2020. The agency also included an "accelerated case" where growth could reach 550GW in 2024.

To get a sense of the scale: one GW is enough to power about 700,000 homes or 100 million LED-lightbulbs.

China has further consolidated its leading position and is set to account for almost 55 percent of global renewable additions in both 2023 and 2024. But the expansion is happening in all major markets, including the US, India, and Europe.

The report highlighted Europe's upward revision of renewable capacity additions by 40 percent following Russia's invasion of Ukraine. The increase in solar and wind uptake is driven by high electricity prices and increased policy support, particularly in Germany, Italy, and the Netherlands.

"EU consumers are expected to save an estimated €100bn between 2021 and 2023 thanks to additional electricity generation from newly installed solar PV and wind capacity," the IEA wrote.

Without the additional renewable capacity, wholesale electricity prices in Europe would have been 8 percent higher in 2022, it noted.

Solar PV contributes two-thirds of this year's increase in renewable power capacity. The agency anticipates solar manufacturing capacity to more than double to 1000 GW by 2024, driven by China and increased supply in the United States, India, and Europe.

"Based on those trends, the world will have enough solar PV manufacturing capacity in 2030 to comfortably meet the level of annual demand envisaged in the IEA's Net Zero Emissions by 2050 Scenario," the agency noted.

Wind

Following two years of decline, wind power is set to rebound strongly in 2023, with a growth rate of almost 70 percent compared to the previous year.

The completion of projects delayed by Covid-19 restrictions in China and supply chain issues in Europe and the United States will contribute to this growth.

However, further expansion in 2024 will depend on increased policy support to address permit and auction design challenges. Unlike solar PV, wind turbine supply chains are struggling to keep up with accelerating demand due to rising commodity prices and supply chain problems, affecting the profitability of manufacturers.

Even though wind and solar are showing strong growth, slow permit-issuing processes still need to be improved, especially in Europe.

Competitive renewable energy auctions resulted in the awarding of a record-breaking 100 GW of new capacity. However, 20 GW remained unallocated, the highest ever level, with Europe accounting for two-thirds of it.

The IEA noted the European Commission had done more to simplify permitting in the past 18 months than in the "entire previous decade."

But at least 59 GW of onshore wind capacity (four times the capacity commissioned in 2022) is held up in various permit procedures in Europe and can still take up to five years.

Solar projects generally take less time to complete, but there are cases of significant delay. For example, 4 GW of solar capacity is being held up in Portugal, almost five times the capacity the country commissioned in 2022.

Streamlining the process further by identifying preferential areas and setting clear permit timelines could increase renewable energy deployment by 30 percent until 2027, as noted by the IEA.