Despite several headwinds for the renewable energy market caused by the pandemic, such as supply chain bottlenecks, material price hikes, and construction delays, the world added a record amount of new solar, wind, and other renewable capacity last year, said International Energy Agency (IEA).
According to a new report released by the agency, the world added 295 GW of additional renewable power capacity in 2021. China commissioned 134.8 GW last year, accounting for 46% of the world’s total. The European Union and the United State came in as the second and third largest market, having added 47 GW and 36.2 GW, respectively.
Renewable capacity is expected to further increase in 2022, reaching almost 320 GW, equivalent to the entire electricity demand of Germany. Solar energy is likely to account for 60% of the increase in global renewable capacity with the commissioning of 190 GW.
Growth in China and the EU has already outpaced expectations. However, there is still a long way to go until the world achieves 100% renewable electricity. Currently, only 28% of global electricity are generated from renewable sources. The report also warns that solar expansion cannot fully compensate for lower hydropower and steady wind addition, and growth may remain stable in 2023 if policies are not changed.
Fatih Birol, executive director of the IEA, urged governments to cut red tape, accelerate permission process, and provide the right incentives for faster renewables deployment to address today’s energy security and market challenges.
The 2022 forecast for US solar market is revised down 17% due to market uncertainty. In June 2021, the US government imposed sanctions on polysilicon from Xinjiang, China. Earlier this March, the Department of Commerce launched an investigation into solar panel manufacturers from Southeast Asia, which has delayed billions of dollars in new solar projects.
On the other hand, the IEA forecasts that the urgent new push for energy security in Europe as a result of Russia’s invasion in Ukraine may be enough to propel growth forward. According to the report, the policy implemented over the next six months will be essential in determining whether the world can maintain its current pace.
