Renewable Energy Sees Strong Growth But Not Enough

The renewable energy sector saw record growth in 2021 but the International Energy Agency (IEA) forecasts that the ongoing surge in investments won't be enough to put the world on track for net-zero emissions by 2050.

The IEA's "Renewables 2021" report forecasts that by 2026, global renewable electricity capacity will reach 4,800 gigawatts (GW), a 60% increase from 2020 levels. That means that over the next few years, the world should be able to produce more than half of its electricity from renewable sources, up from nearly 37% at the end of 2020.

However, to avoid a climate catastrophe, renewable energy capacity would need to grow twice as fast and, on top of that, biofuels and the use of renewable space heating would need to grow exponentially.

When it comes to growth, China is expected to continue leading the way, as it is forecast to account for 43% of global renewable capacity additions in the 2021-26 period, followed by Europe, where consumers are installing large amounts of solar panels and member countries and corporations are increasingly buying renewable energy.

The U.S. will see strong growth thanks to efforts by the administration of President Joe Biden to boost renewable energy and the fact that solar and wind are more competitive than fossil fuel power stations, while India’s renewable energy sector is expected to double thanks to ambitious government targets.

“The growth of renewables in India is outstanding, supporting the government’s newly announced goal of reaching 500 GW of renewable power capacity by 2030 and highlighting India’s broader potential to accelerate its clean energy transition,” said IEA Executive Director Fatih Birol.

Much of the growth over the next few years will come from solar photovoltaic, while total offshore wind capacity is expected to triple thanks to new projects in the U.S., Taiwan, Korea, Vietnam, and Japan. Onshore wind growth will likely slow down after a record year in 2020.

Persistent Challenges

To successfully decarbonize their electricity sectors over the next three decades, governments would need to allocate more funding to renewable energy, issue more ambitious goals, upgrade their power grids, and overcome multiple social, policy, and financial challenges, the report says.

Prices of polysilicon, a raw material in solar panels, have quadrupled over the past couple of years, while steel has increased by 50%, aluminum by 80%, and copper by 60%, hence raising the costs of building new solar and wind energy facilities. 

The IEA warns that these high prices, which could be exacerbated by trade disputes and higher shipping costs, could stymie the growth of the renewable energy sector if they continue unabated through 2022.

Energy efficiency would also need to improve to reduce demand for power, which has surged amid the global economic rebound that the world has seen this year. Because natural prices were high, many utility companies chose to burn coal instead to produce electricity, which led to a 9% year-over-year increase in coal-fired power generation after two years of declines. 

“Without strong and immediate actions by governments to tackle coal emissions – in a way that is fair, affordable, and secure for those affected—we will have little chance, if any at all, of limiting global warming to 1.5 degrees Celsius,” Birol said, referring to the temperature threshold that scientists say would exacerbate climate change.

But that seems unlikely. China and India, which produce most of their electricity by burning coal, plan to build new coal-fired power plants over the next few years, and major coal users including the U.S. and Australia have not committed to phasing out coal. On top of that, natural gas-fired power generation rose considerably over the past decade, and nuclear energy capacity has only seen a modest increase.

The result is that the world is still producing much of its electricity by burning fossil fuels.

“As much as I love the recent rapid growth of renewables, the share of fossil fuels in the global energy system has barely budged in 50 years. We should be closing coal plants and extending the useful life of nuclear plants, and yet some nations are doing the exact opposite,” tweeted Dr. Robert Rohde, lead scientist at the Berkeley Earth climate change research group.