IEA predicts renewable energy growth will double over next five years
The world’s total renewable-based power capacity is forecasted to grow by a whopping 50% over the next five years, according to a new report from the International Energy Agency (IEA). As much as 60% of the predicted 1,200 gigawatt increase, which is the equivalent to the current total power capacity of the United States, is expected to come from solar energy. However, even these encouraging renewable energy growth trends aren’t enough to meet climate change targets experts warn.
The future of the renewable energy industry
The installation of solar PV systems on homes, commercial buildings and industrial facilities is set to take off over the next five years; transforming the way electricity is generated and consumed. That’s according to the International Energy Agency’s latest Renewables 2019 market forecast concerning renewable energy growth.
The report forecasts that the world’s total renewable-based power capacity will grow by 50% between 2019 and 2024. This increase, which is largely driven by cost reductions and concerted government policy efforts, is predicted to uplift the renewable energy sector’s share of global power generation from the current figure of 26% to 30% by 2024.
Renewable energy markets need to accelerate faster
The expected renewable energy growth comes after renewable capacity additions stalled last year for the first time in almost two decades. Despite the seemingly positive outlook for the renewable energy sector, the IEA warns that the renewed expansion still remains well below what is needed to meet pressing global sustainable energy targets.
“Renewables are already the world's second largest source of electricity, but their deployment still needs to accelerate if we are to achieve long-term climate, air quality and energy access goals,” said Dr Fatih Birol, the IEA’s Executive Director.
Distributed PV to play major role in renewable energy growth
Distributed PV accounts for almost half of the growth in the overall solar PV market through 2024. Contrary to conventional wisdom, commercial and industrial applications rather than residential uses dominate distributed PV growth, accounting for three-quarters of new installations over the next five years.
This is because economies of scale, combined with better alignment of PV supply and electricity demand, enable more self-consumption and bigger savings on electricity bills in the commercial and industrial sectors. Still, the number of solar rooftop systems on homes is set to more than double to some 100 million by 2024. The top markets on a per capita basis that year are forecast to be Australia, Belgium, California, the Netherlands and Austria.
“As costs continue to fall, we have a growing incentive to ramp up the deployment of solar PV,” said Dr Birol. The cost of generating electricity from distributed solar PV systems is already below retail electricity prices in most countries. The IEA forecasts that these costs will decline by a further 15% to 35% by 2024, making the technology more attractive and prompting worldwide adoption.
The report warns, however, that important policy and tariff reforms are needed to ensure distributed PV’s growth is sustainable. Unmanaged growth could disrupt electricity markets by raising system costs, challenging the grid integration of renewables and reducing the revenues of network operators.
’Breathtaking’ potential for renewable energy sector
By reforming retail tariffs and adapting policies, utilities and governments can attract investment in distributed PV while also securing enough revenues to pay for fixed network assets and ensuring that the cost burden is allocated fairly among all consumers.
According to the IEA’s report, improving economics, policy support and more effective regulation could push distributed PV’s global installed capacity above 600 GW by 2024. That’s almost double Japan’s total power capacity today. Yet this accelerated growth is still only 6% of distributed PV’s technical potential based on total available rooftop area.
“Distributed PV’s potential is breathtaking, but its development needs to be well managed to balance the different interests of PV system owners, other consumers and energy and distribution companies,” Dr Birol said. “The IEA is ready to advise governments on what is needed to take full advantage of this rapidly emerging technology without jeopardising electricity security.”
For more information, visit www.iea.org/renewables2019.
International Energy Agency (IEA)
The International Energy Agency is a Paris-based autonomous intergovernmental organisation that works to ensure clean energy and regularly examines all world energy issues including oil, gas, coal supply and demand, renewable energy and much more.
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