Workers install support pillars for solar panels during construction at the Ningxia Tengger Desert New Energy Base in China's northern Ningxia region, on Dec. 9, 2023.STR/Getty Images
Global renewable energy capacity soared by 50 per cent in 2023, driven by record increases in Europe and the United States and what the International Energy Agency calls the “extraordinary” growth of solar farms in China.
2023 marked the 22nd year in a row that renewable capacity growth set a new record, according to a report released by the Paris-based energy watchdog Thursday. The IEA expects expansion through to 2028 will be the fastest yet, with global renewable capacity on course to increase by two-and-a-half times by 2030.
That means more renewable capacity will be added in the next five years than has been installed since the first commercial renewable energy power plant was built more than 100 years ago, the report says. The adoption of renewables, including solar, wind, hydropower, biofuel and others, is key to the world’s transition to the more sustainable energy systems needed to limit the worst effects of climate change.
“It’s not enough yet to reach the COP28 goal of tripling renewables, but we’re moving closer – and governments have the tools needed to close the gap,” IEA executive director Fatih Birol said in a statement, referring to the target that world governments set at the UN climate change conference in the United Arab Emirates last month.
Onshore wind and solar power production are cheaper today than that from fossil fuel plants in most countries, according to the report. That helped drive significant growth in solar in particular, which alone accounted for three-quarters of increased renewable capacity worldwide.
China has set the most dizzying pace. In 2023, it brought online as much solar power as the entire world did in 2022, and its wind power generation grew by 66 per cent year-on-year.
“While the increases in renewable capacity in Europe, the United States and Brazil hit all-time highs, China’s acceleration was extraordinary,” the report says.
Onshore wind and solar production in the country is accelerating even after national subsidies were phased out by 2021. Growth is being driven by economic attractiveness as well as a supportive policy environment, according to the report.
“China’s role is critical in reaching the global goal of tripling renewables because the country is expected to install more than half of the new capacity required globally by 2030. At the end of the forecast period, almost half of China’s electricity generation will come from renewable energy sources.”
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The country is also expected to retain the lion’s share of global supply chains for solar panels, the price of which declined by almost half year-on-year, with manufacturing capacity reaching three times 2021 levels.
Unlike solar, the wind industry has experienced a “significant decline in market value” as European and North American wind turbine manufacturers grapple with volatile demand, limited raw material access, economic challenges and rising interest rates. But the report notes that Chinese manufacturers remain relatively stable amid global challenges, benefiting from strong domestic demand.
Under existing policies and market conditions, global renewable power capacity is expected to reach 7,300 gigawatts by 2028. Solar and wind are tipped to account for 95 per cent of that expansion, with renewables overtaking coal to become the largest source of electricity generation by early 2025.
Despite the massive global growth in renewables, the report comes with a warning: That success in meeting the COP28 goal to triple renewables capacity by 2030 will hinge on helping emerging and developing economies.
“For me, the most important challenge for the international community is rapidly scaling up financing and deployment of renewables in most emerging and developing economies, many of which are being left behind in the new energy economy,” Mr. Birol said.
G20 countries account for almost 90 per cent of global renewable power capacity today. The IEA says those economies can further increase capacity by overcoming policy uncertainties, investing more in grid infrastructure to allow for the faster expansion of renewables, removing cumbersome administrative barriers and permitting procedures and social acceptance issues.