According to the Renewables 2022 report, prepared by the International Energy Agency (IEA) and presented in Madrid by Heymi Bahar, senior analyst for Renewable Energy Policy and Markets at the IEA, global renewable energy capacity will increase by 2,400 gigawatts between 2022 and 2027. Right now, there are fewer than 400 gigawatts of nuclear power in operation worldwide (and 191 reactors decommissioned or in the process of being decommissioned). Europe, a pioneer of the green transition, is soaring, according to Renewables 2022, and will install twice as much green power in this next five-year period as in the previous one.
The Renewables 2022 report, presented at the Spanish Energy Club by Heymi Bahar and Arcadio Gutiérrez, CEO of Enerclub, examines (1) key developments and trends for the sector, including the more ambitious renewable energy targets recently proposed by the European Union; (2) the diversification of solar photovoltaic manufacturing; (3) renewable capacity for hydrogen production; and (4) the biofuels industry. And the overall conclusion it draws is unequivocal: concerns about ensuring energy security in the wake of the Russian invasion of Ukraine have led countries to increasingly turn to renewable energy, such as solar and wind power, and, in this context, “global renewable energy capacity is estimated to increase by 2,400 gigawatts (GW) between 2022 and 2027”.
The growth envisioned by the International Energy Agency is 30% higher than the forecast made by the IEA itself a year ago, indicating the speed with which governments have taken steps to increase the use of renewable energy. The report forecasts that renewables will account for more than 90% of the growth in global electricity capacity over the next five years.
IEA Senior Analyst for Renewable Energy Policy and Markets Heymi Bahar explained that renewable power will grow in the next five years as much as it has in the last 20 years. “Thus,” he said, “the current energy crisis can be a turning point towards a cleaner and more secure energy system. This continued acceleration of renewable energies invites optimism in trying to limit the increase in global warming to 1.5°C.”
In Europe, the need to replace Russian gas, coupled with strong climate ambition, is accelerating the transition. According to the IEA, the renewable power that will light Europe between 2022-2027 will double that connected in the previous five years. However, the report points out that the EU’s growth would be greater if its Member States simplified and reduced permitting deadlines, increased incentives for biofuels for transport and further promoted heat technology.
Other regions that will also contribute to the increased presence of renewables in the next five years, according to the IEA, are China, the United States and India, whose measures to combat the energy crisis are being implemented “faster” than expected.
As a result of its recent 14th Five-Year Plan, China is expected to account for nearly half of the new global renewable energy capacity during the 2022-2027 period. The United States is also incentivizing renewable energy development with the Inflation Reduction Act.
Global demand for biofuels
Renewable capacity for hydrogen production increases 100-fold, reaching 50 GW in 2027, which represents less than 2% of the growth forecast by the Agency between 2022-27. This growth is occurring on all continents.
According to Renewables 2022, solar PV and wind power will be the “most competitive” options for new electricity generation in almost all countries.
By 2027, solar PV will become the world’s largest installed capacity technology for power generation, overtaking gas in 2026 and coal in 2027.
Meanwhile, global wind capacity will double in the next five years, with offshore projects accounting for one-fifth of that growth.
The study notes a diversification of solar panel manufacturing in the world, with the United States and India advancing their positions. China, until now a major player, would go from representing 90% of the market to 75% in 2027.
Global demand for biofuels is expected to increase by 22% over the next five years, boosted by the volatility and high prices of gas and oil. The United States, Canada, Brazil, Indonesia, and India will account for 80% of this growth.
All data cited above refer to the current policy scenario contemplated by the IEA. The report also presents an accelerated forecast in which renewable energy capacity would grow 25% above the stated policy forecast.
Globally, this accelerated scenario would require supply chain solutions, as well as expanded and more flexible grids to more securely manage the increased capacity of variable renewables. This scenario would achieve net-zero emissions by 2050, and bring us closer to limiting the increase in global warming to 1.5°C.
Source: Renewable Energies (2023)