Solar power is booming as the energy crisis drives a post-war shift to renewables in Ukraine and is expected to overtake coal-fired power by 2027, according to forecasts by the International Energy Agency.
Renewable energy as a whole will become the world’s largest source of electricity generation by early 2025, the IEA said, and the world will add twice as much renewable capacity from 2022 to 2027 as over the past of the previous five years.
Not only were countries driving the “expansion of new renewable energy” to meet climate goals, but energy security and the need to “diversify” renewable energy supply chains outside of China had become increasingly important,” IEA Executive Director Fatih Birol said in an interview.
“There is strong competition between the largest economies in the world to have a pole position when it comes to the next chapter of the industrial sector,” he said, whether in solar, wind, batteries or electric vehicles.
The rush to replace oil and gas that no longer comes from Russia and to build domestic renewable energy sectors has led to push for industrial incentives and subsidies.
The United States is moving forward with its landmark climate package, the $369 billion Cut Inflation Act, which includes incentives for solar manufacturing through $10 billion in tax credits for clean energy overall and $27 billion set aside in a “green bank” to support clean energy projects in communities.
Between 2022 and 2027, global renewable energy capacity will increase by 2,400 gigawatts, an amount equal to China’s power capacity today, the IEA estimated in its latest annual renewable energy report. This is 30% more than the IEA predicted a year ago.
The United States and India should lead the diversification of the solar manufacturing supply chain, the IEA said, reducing China’s dominance. The two countries’ solar investments are expected to reach nearly $25 billion between 2022 and 2027, seven times more than in the past five years.
China will remain a “dominant player,” the IEA said, however, with its market share estimated at around 75% in 2027 from 90% today.
The IEA warned in June that China’s grip on the solar panel supply chain could slow the global transition to cleaner energy. The country will account for nearly half of newly added renewable energy by 2027, helped by policies included in China’s latest five-year plan, the agency said this week.
The solar boom is expected to accelerate over the next two years. Iberdrola, one of Europe’s leading renewable energy companies, planned to “more than double our global solar capacity to 10.6 gigawatts by the end of 2025”, said Xabier Viteri Solaun, energy business director sustainable.
Solar projects can be developed and built faster than other renewable sources, he added, and the company is “seeing an increase in solar capacity being added to new and existing wind farms”.
Even faster growth can occur if European countries make it easier to obtain permits for new projects, improve incentives for rooftop solar installations and offer better terms in renewable energy auctions, noted the OUCH.
Despite encouraging general trends, the European wind industry suffered from a “major challenge”, Birol said. The combination of Chinese and American competition and soaring raw material and supply costs are creating financial strains.
Birol also repeated warnings about replacing Russia’s fossil fuels with new oil and gas projects. Supply should come from existing fields, he said, while steps should be taken to reduce demand.
“Russia’s invasion of Ukraine should not be a justification for large-scale fossil fuel investments,” he said, as these would not only put “climate goals at risk” , but would eventually become stranded assets.
However, even with the IEA’s “accelerated” scenario – where renewable capacity grows faster than in the main case due to policies and other measures that are not currently underway – the world will not achieve this. which is necessary to limit global warming.
Temperatures have already risen by at least 1.1°C since the late 1800s. Under the Paris Agreement, nearly 200 countries have agreed to cut emissions enough to keep the rise well below 2C, and ideally 1.5C.
The growth of renewables would “significantly reduce the gap” with the track, bringing total capacity to 2,950 GW by 2027, the IEA said. But that would still leave an 800 GW gap to achieving net zero greenhouse gas emissions by 2050.
Where climate change meets business, markets and politics. Check out the FT’s coverage here.
Curious about the FT’s commitments to environmental sustainability? Learn more about our scientific goals here
#Solar #power #set #overtake #coal #years #IEA