Energy crisis prompts sharp increase in IEA’s renewables forecast
Share of cumulative power capacity by technology, 2010-2027. Image by IEA; Renewables 2022, License: CC BY 4.0.
The energy crisis, provoked by Russia’s invasion of Ukraine, is significantly accelerating the uptake of renewables, with the world expected to add almost 2,400 GW of renewable capacity in the 2022-2027 period in the International Energy Agency’s (IEA) main forecast.
This is as much as what was installed in the past 20 years and almost 30% higher than last year’s forecast, representing IEA’s largest ever upward revision. The increased outlook is mainly driven by China, the EU, the US and India, which are moving faster than expected on new and existing policies amid energy security concerns and high fossil fuel prices.
According to IEA’s Renewables 2022 report, out today, renewables will account for over 90% of global electricity capacity expansion over the next five years.
They will overtake coal as the largest electricity generation source by early 2025 and reach a 38% share of the power mix in 2027, up from 28% in 2021.
Cumulative solar photovoltaic (PV) capacity will almost triple, expanding by almost 1,500 GW over the period and becoming the power technology with the largest capacity in the world.
Wind capacity globally will almost double, with offshore wind accounting for one-fifth of the growth. There will be over 570 GW of onshore wind installations over the 2022-2027 period, with annual additions exceeding their 2020 record only towards the end of the period, constrained by lengthy permitting and lack of grid upgrades.
There is potential for more renewables growth if countries tackle policy, regulatory, permitting and financing challenges. In this accelerated case, global renewable capacity increases by almost 3,000 GW, which is closer to a pathway consistent with net zero emissions by 2050.
Commenting on the report, IEA executive director Fatih Birol said: “This is a clear example of how the current energy crisis can be a historic turning point towards a cleaner and more secure energy system. Renewables’ continued acceleration is critical to help keep the door open to limiting global warming to 1.5 degrees C.”
The report also says that new policies in the US and India could result in more diversification in global PV supply chains. The two countries are expected to see almost USD 25 billion (EUR 23.6bn) in solar PV manufacturing investment in the 2022-2027 period. China, however, will remain the dominant player with USD 90 billion in expected investment, although its share in global manufacturing capacity could decline from 80‑95% now to 75-90%, depending on the manufacturing segment.