New IEA Report on the Growth, Forecasts, and Challenges of Renewable Energy
Photo by Jason Blackeye on Unsplash
Major changes, uncertainties, and setbacks color the unprecedented condition we are now in caused by the COVID-19 pandemic. At SDG Moment 2021 during the United Nations General Assembly last year, a data report on SDG Progress provided a bleak reality check. We are still far behind our Global Goals.
Yet, there is good news: the growth of new renewable power capacity in 2021 was higher than ever.
This forecast is from Renewables 2021, a report by the International Energy Agency (IEA). This report was released in December 2021, providing current market analysis and forecasts of renewable energy growth until 2026.
Created in 1974, the IEA originally aimed to ensure oil supply security. As time goes, the IEA keeps its focus on energy security but has evolved. The agency now carries a mission to work with governments and industry to shape a secure and sustainable energy future for all.
The report stated that almost 290 gigawatts (GW) of new renewable power would be commissioned in 2021, which was 3% higher than in 2020. This growth emerged despite the increased production and transport costs due to rising commodity, energy, and shipping prices. The biggest growth came from Solar PV—accounting for 60% of it—followed by wind and hydropower.
Renewables 2021 forecasts that renewable power capacity growth will accelerate in the next five years. It is set to increase by over 60% between 2020 and 2026, with China in the lead and followed by Europe, the USA, and India.
The report also explores key challenges and identifies barriers to overcome in the renewable energy industry. While the growth in 2021 was good and the forecasts up to 2026 sound promising, they are still not enough.
Renewable energy needs to grow further and faster to reach the IEA’s Net Zero Emissions by 2050 Scenario. The IEA estimated that the forecasted growth through 2026 must go up to 80% higher than the current forecasts to achieve net-zero.
Renewables 2021 reveals the main barriers governments must address:
- For wind and solar PV projects in advanced economies, various challenges to permitting and grid integration have led to lower-than-planned capacity being awarded in government auctions.
- In emerging and developing economies, stop-and-go policies, the lack of grid availability, and risks concerning off-takers’ financial health hurt investor confidence, resulting in elevated financing rates.
- Lack of remuneration and targeted policy support for flexibility are issues in all countries.
- Challenges concerning the social acceptance of wind and hydropower projects caused an increasing number of countries to delay or cancel planned projects.
Editor: Marlis Afridah
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Nazalea Kusuma
Naz is the Manager for Editorial Asia at Green Network. She performs the role of Editor for Green Network Asia and Reviewer for Green Network ID.
