Renewable capacity growth to slow down after 2014 - IEA
Aug 28, 2014 - Worldwide annual additions of renewable energy capacity will slow down and stabilise after 2014 due to current policy uncertainties, the International Energy Agency (IEA) warns in a new report.
The projected slowdown may lead to renewables falling short of the absolute generation levels required to achieve global climate change goals, the agency stressed.
The Medium-Term Renewable Energy Market Report 2014 says that annual investments in new renewables capacity will surpass USD 230 billion (EUR 174bn) on average over the next five years. This would represent a decline from the roughly USD 250 billion spent in the sector last year. IEA blames the projected drop on expectations for a decrease in the unit investment costs for certain technologies and a slowdown in global capacity growth driven by policy and market risks.
IEA executive director Maria van der Hoeven explained in a statement that policy and regulatory uncertainty is increasing in some key markets because of concerns about deployment costs. “Governments must distinguish more clearly between the past, present and future, as costs are falling over time,” she said, adding that high incentive levels are no longer necessary for many renewable technologies. Instead, investors need a market context that assures a reasonable and predictable return for them, the director noted.
Meanwhile, global renewable energy generation is expected to rise 45% by 2020, the third annual edition of the report shows. According to it, electricity production from renewable sources, including wind, solar and hydropower, reached 22% of global generation in 2013 and is to increase to almost 26% over the next five years. IEA noted that the share of renewable sources in energy use for heat generation will go up to just 9% at the end of the decade from 8% in 2013.