The International Energy Agency (IEA) said new global renewable power capacity is expected to rise at its fastest pace ever this year, but noted that countries will have to double the amount of new capacity in order to make net-zero emission goals by mid-century.
Renewable power capacity is forecasted to rise by 290 gigawatts (GW) in 2021, surpassing previous all-time highs achieved last year by 3%, the Paris-based intergovernmental agency said in a new 173-page report released on Wednesday.
Solar power accounted for half of the renewable energy growth, followed by wind and hydropower.
Over the next five years, renewable energy capacity is expected to grow 60% bigger over 2020 levels, accounting for 95% of the increase in global energy capacity, however the IEA says this pace of growth will still fall well short of global goals for a net-zero emissions economy.
Renewable capacity is rising at a record pace despite the increase in prices for materials to build and transport new solar panels and wind turbines worldwide.
Since the beginning of 2020, prices for photovoltaic (PV)-grade polysilicon more than quadrupled; steel increased by 50%; aluminium is up by 80%; copper increased by 60%; and freight fees have risen six-fold, according to the report.
The IEA said it expects government support for renewable energy to overcome this increase in commodity prices and drive new record highs for capacity increases.
However, if commodity prices remain high through the end of 2022, it could erase three years of cost reductions of solar panels and six years of reduced costs for wind.
Demand for renewables
Demand for renewable energy plummeted last year amid the pandemic, but this year demand is back above 2019 levels, according to the report.
Governments are largely responsible for the rising demand as power grids shift to renewable forms of energy, IEA said.
The US Senate is on the verge of passing $555bn (€489.3bn, £416.7bn) of new spending on climate and clean-energy initiatives through President Joe Biden’s ‘Build Back Better’ bill, which was passed by the House of Representatives last month and now just needs Senate approval before it can be signed into law.
That level of investment in renewables comes in addition to the billions of dollars of spending already approved in the $1.2trn bipartisan infrastructure bill passed last month.
Despite this rise in demand, IEA forecasts that demand for biofuels would have to increase fourfold above its base case scenario over the next five years in order to be on track to meet net-zero goals. Likewise, renewable heat sources would have to increase threefold to meet those goals.