The IEA expects global renewable power capacity to rise by 2,400GW over 2022-27 under its "main-case" forecast, driven by energy security fears as countries look to reduce reliance on fossil fuels, but projections still fall far short on global 2050 net zero targets.

 

In its Renewables 2022 report, Paris-based energy watchdog the IEA made the largest upward revision to date to its renewables forecast, lifting it by nearly 30pc from a year earlier. Renewables will become the largest source of global energy generation by early 2025, surpassing coal, it predicted.

 

Renewables are the only source of electricity generation set to grow over the next five years as power generated by coal, oil, nuclear and natural gas is set to fall, the IEA's main-case scenario found.

 

China, the EU, US and India are the main drivers behind the IEA's higher estimates, as the jurisdictions are applying existing policies and introducing new ones "more quickly than expected in reaction to the energy crisis", the IEA said. It cited China's fourteenth Five-Year Plan, as well as the EU's REPowerEU and US' Inflation Reduction Act. The latter "provides unprecedented long-term policy visibility for multiple technologies", the IEA said.

 

The IEA's main-case forecast is based on countries' targets and policy incentives, although these are hampered by "implementation challenges", such as permitting delays, the expansion of grid infrastructure and, in developing countries, a lack of access to financing.

 

If countries addressed these issues over the next two years, renewable capacity additions under the IEA's ‘accelerated case' are forecast to reach new capacity of 2,950GW — nearly 25pc higher than the main-case scenario.

 

But the main-case projection falls substantially short of what is required to reach global net zero emissions by 2050. The pace of renewable capacity expansion over 2022-27 must increase by 60pc from the main-case forecast to be in line with the IEA's net zero by 2050 scenario, the organisation said.

 

The IEA forecasts that electricity from wind and solar will more than double over the next five years and together provide around a fifth of global power generation in 2027. Wind and solar will together make up 80pc of the increase in renewables worldwide in 2022-27, "which will require additional sources of power system flexibility", it noted. Despite this, dispatchable renewables make up just 10pc of forecast growth, the IEA said.

 

And global installed solar power capacity is set to overtake installed capacity of coal-fired generation by 2027. The IEA forecasts that cumulative solar capacity will nearly triple, increasing by almost 1,500GW between 2022-27, "exceeding natural gas by 2026 and coal by 2027."

 

Global wind capacity will almost double over the next five years, in the IEA's forecast, with offshore projects set to make up a fifth of the growth and more than 570GW of new onshore wind set to become operational, both between 2022-27.

 

But "lengthy permitting procedures and lack of improvements to grid infrastructure" will slow onshore wind capacity additions, the IEA said. Forecast growth is largely due to competitive auctions, although there are "increasing contributions" from corporate power purchase agreements, bilateral contracts and merchant activity, the IEA said. And the organisation noted rising investment costs for solar and wind, up by 10-20pc and 15-25pc, respectively, from "pre-Covid levels" — owing to higher commodities and transport prices and supply chain disruptions.

 

The use of renewables in the heating sector is expected to grow by nearly a third over 2022-27, upping the share of renewables in heating from 11pc to 14pc in 2027, the IEA said. But this is "insufficient to contain fossil fuel-based heat consumption", it added. Bioenergy is expected to remain the primary source of renewables in the heat segment, expanding by nearly 1 exajoule over 2022-27, the IEA forecast.