Renewable energy capacity is set to grow by a third in 2023, driven in large part by the big push into solar and wind power by China, according to projections from the International Energy Agency.
In the largest annual expansion to date, the International Energy Agency has estimated renewable capacity will increase by 107 gigawatts to 440 gigawatts – equal to the total installed capacity capacity of Germany and Spain.
The IEA said a combination of government subsidies, energy security concerns and the growing competitiveness of renewables against fossil fuels were behind the expected increase, outweighing challenges posed by higher interest rates, rising investment costs and supply chain challenges.
While expansion is underway in the world’s largest market, China was expected to cement its position as a leader in renewable energy, which is set to account for 55 percent of global annual added capacity in 2024.
China has promoted the development of large-scale solar projects to provide energy cheaper than standard coal prices for electricity, as well as smaller-scale installations for public enterprises and state-owned enterprises.
The country is also expected to be behind a nearly 70 percent global recovery in wind power capacity in 2023, after deploying about a third less than expected in 2022.
This came on the heels of Covid-19 restrictions that have delayed many onshore and offshore projects that are now expected to become operational in 2023 and 2024. This would bring China’s share of global wind capacity expansion to more than 60 percent. over the next two years.
In the United States and Europe, supply chain issues have also delayed wind projects that were planned for 2022 until 2023.
But it was solar electricity panels, or solar photovoltaics, that accounted for two-thirds of the total increase in the renewable energy forecast for 2023, whether from large-scale plants or smaller systems, including rooftop installations.
Solar PV manufacturing capacity is expected to double to 1,000 GW by 2024, led by China, the United States, India and Europe. Based on current trends, the world will have enough solar manufacturing capacity to meet the International Energy Agency’s scenario for net greenhouse gas emissions by 2050.
However, the agency warned that more political support for renewables, as well as improvements in grid infrastructure, would be needed to meet demand.
“Policies must adapt to changing market conditions, and we need to upgrade and expand power grids to ensure that we fully harness the vast potential of solar and wind energy,” said Fatih Birol, Executive Director of the International Energy Agency.
Projections for renewable energy capabilities in Europe have increased by 40 percent since Russia’s full-scale invasion of Ukraine prompted many countries to boost their solar and wind energy capabilities to replace Russian natural gas. Higher energy prices have made rooftop solar plants more financially viable and boosted policy support in markets such as Germany, Italy and the Netherlands.
The International Energy Agency estimates that newly installed solar and wind power saved EU electricity consumers €100 billion over the period 2021-2023.
The International Energy Agency said that biofuels helped avert the use of 2 million barrels of oil in 2022, as countries with feedstocks and spare capacity, such as Argentina, India and Indonesia, boosted production to reduce imports of fossil fuels.
The updated biofuel forecast was based on an 11 percent increase in new demand by 2024, with nearly two-thirds of that demand coming from emerging markets. However, new policies in developed markets are not expected to affect production until after 2024, with higher prices, feedstock supply issues and technical constraints limiting growth.
“Although the scale of new projects is impressive, it has not yet reached a level that would avoid a crisis in the supply of raw materials, and the feasibility of most [biofuels] Not certain,” the IEA said.
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