Despite the Covid 19 epidemic and rising costs for raw materials, 290 GW of new renewable energy generation capacity has been installed around the world this year, beating the previous record last year, according to the International Energy Agency IEA. Renewable energy generating capacity will surpass fossil fuels and nuclear energy combined by 2026, according to current trends.
Many governments have set themselves higher ambitions to reduce greenhouse gas emissions before and at the Cop 26 UN climate summit in Glasgow last month, with the growth driven by new climate and energy policies in many countries around the world.
By mid-century, this level of growth is only half that is required to meet net zero carbon emissions.
The high commodity and energy prices we are seeing today pose new challenges for the renewable industry, but elevated fossil fuel prices make renewables even more competitive. Renewables will account for about 95% of the increase in global power-generation capacity from now to the end of 2026, with solar power providing about half of the increase, according to the IEA report released on Wednesday.
The world has emerged from the Covid epidemic and the energy price has gone up as raw material prices have gone up. Some of the cost falls in the renewable sector have been cancelled due to these price increases. If wind power is restored next year, the cost of wind power will return to levels last seen in 2015, and two to three years of cost falls in solar power will be wiped out.
The report's lead author Heymi Bahar said that commodity prices were not the main obstacles to growth. He noted that wind and solar energy would still be cheaper than fossil fuels in most areas. Policy measures were needed to expand the use of solar power for consumers and industry, as permitting was the main barrier to new wind energy projects around the world.
He said there needed to be a gear change to meet net zero. We need to move up another gear now because we have seen a very important gear change in recent years. We have the tools, and it is possible. Governments need to show more ambition, not just on targets, but rather on policy measures and plans. China has installed the most new renewable energy capacity this year, and is projected to reach 1,200 GW of wind and solar capacity in 2026, four years earlier than its target of 2030. China is the world's biggest carbon emitter, but the government was reluctant to commit at Cop 26 to the strengthening of its emissions-cutting targets, which many observers had hoped for.
China is hoping to get a peak in emissions by 2030, which many analysts say is too late if the world is to limit global temperature rises to 1.5 C above pre-industrial levels, the Paris agreement target that was the focus of the Cop 26 talks.
Birol said that China's rapid expansion of renewable energy suggested that the country could reach an emissions peak well before 2030. India, the world's third biggest emitter, also experienced strong growth in renewable energy capacity in the past year, but its target of net zero by 2070 is also regarded as too weak by many. Birol said India has a broader potential to speed up its clean energy transition and that the growth of renewables in India is outstanding, supporting the government's newly announced goal of 500 GW of renewable power capacity by 2030.