The International Energy Agency (IEA) has increased its forecast for renewable energy capacity additions by more than 14% for the period 2019-2024 compared with last year.
Renewable power capacity is set to rise by 50% to 3,722 GW, according to the IEA’s Renewables 2019 report published October 21.
New capacity of 1,220 GW will be added globally, 60% solar PV, 25% onshore wind and 4% offshore wind. Hydropower accounts for 10% with bioenergy technologies making up the remainder.
Renewables will account for two-thirds of all power capacity additions globally over the forecast period, including fossil fuels and nuclear. Overall, renewables, including hydropower, will account for 30% of electricity generation worldwide by 2024.
The key factors identified by the IEA driving the improved outlook are falling costs and more effective policies supporting renewables’ deployment.
In particular, the cost of solar PV is expected to fall by a further 15-35% over the next five years, the IEA says, while competition and cost reductions also drive the expansion of onshore and offshore wind.
Almost 40% of the upward revision in the forecast comes from the EU, where planned auctions for new capacity are being driven by the need to meet the 2020 and 2030 targets set out in the EU’s Renewable Energy Directive.
However, the IEA warns that to meet long-term climate change targets, renewable energy has to accelerate even faster than forecast.
This is possible, the agency says, if governments address three major challenges: policy and regulatory uncertainty; high investment risks in many developing countries and the integration of wind and solar PV into electricity systems.
The IEA highlights a rapid expansion in distributed solar PV.
Overall, distributed PV capacity is forecast to more than double to 530 GW by 2024, with 75% of the increase met by industrial and commercial applications. These applications are much larger than residential systems, reducing unit costs, while electricity demand is high in the day in line with the generation of solar energy, allowing self-consumption, which results in bigger savings on electricity bills.
The IEA says the cost of solar PV in many countries is already lower than the variable portion of electricity prices. The variable portion is the wholesale electricity price, rather than the full retail price paid by end users.
The IEA says that even in its accelerated forecast case, in which distributed solar capacity rises by above 600 GW by 2024, still only 6% of distributed PV’s technical potential will have been used.
It also says that tariff reforms and new policies will be needed to meet the challenge of supporting growth in distributed solar PV, while also securing enough revenue to pay for electricity networks and making sure that the cost burden is allocated fairly among all consumers.
Despite the predicted boom in solar PV, by 2024, wind will account for 7% of global power generation compared with 5% for solar.
In the IEA’s main forecast case, onshore wind capacity is expected to rise by 57% to 850 GW by 2024. Wind power growth is expected to accelerate in the EU as competitive auctions keep prices low.
Offshore wind capacity is expected to rise even faster, almost tripling from 22 GW in 2019 to 65 GW in 2024, at which point it will be generating almost 10% of the world’s wind power.
This expansion will be led by the EU (the UK, Denmark, the Netherlands and Germany), while China becomes the largest single country for offshore wind deployment. Towards the end of the forecast period, the first large additions are expected for offshore wind in the US and Taiwan.
The expansion of renewable electricity generation will have important knock-on effects for heat and transport.
Renewable electricity used for heat is expected to jump by 40% by 2024. But even so renewables’ share of global heat consumption only rises from 10% today to 12% in 2024, which is not in line with climate change targets, according to the IEA.
The agency says renewable heating potential is “vastly underexploited” and calls for greater ambition in this area and stronger policy support.
Meanwhile, electricity met just under 0.3% of transport fuel demand in 2018, but this share is expected to increase by 70% by 2024, owing to rail electrification and the more widespread use of electric vehicles.
At the same time more of this electricity will be generated from renewable energy sources. By 2024, renewable energy (biofuels and renewable electricity) make up just over 5% of transport fuel demand. The IEA estimates that 29% of the electricity used in transport will come from renewable sources by this time.
Photo credits: © IEA