With the global energy crisis as a catalyst, solar PV and wind are set to lead the largest annual increase in new renewable capacity ever, IEA report shows.
Global additions of renewable power capacity are expected to jump by a third in 2023 as growing policy momentum, higher fossil fuel prices and energy security concerns drive strong deployment of solar PV and wind power, according to IEA’s Renewable Energy Market Update published on June 1.
The growth is set to continue next year with the world’s total renewable electricity capacity rising to 4,500 GW, equal to the total power output of China and the United States combined, according to the report.
Global renewable capacity additions are set to soar by 107 GW, the largest absolute increase ever, to more than 440 GW this year. The dynamic expansion is taking place across the world’s major markets. Renewables are at the forefront of Europe’s address to the energy crisis, accelerating the growth there.
New policy measures are also helping drive significant increases in the US and India over the next two years. China, meanwhile, is consolidating its leading position and is set to account for almost 55% of global additions of renewable power capacity in both 2023 and 2024.
“Solar and wind are leading the rapid expansion of the new global energy economy. This year, the world is set to add a record-breaking amount of renewables to electricity systems – more than the total power capacity of Germany and Spain combined,” said IEA Executive Director Fatih Birol.
Solar PV additions will account for two-thirds of this year’s increase in renewable power capacity and are expected to keep growing in 2024, according to the new report. The expansion of large-scale solar PV plants is being accompanied by the growth of smaller systems. Higher electricity prices are stimulating faster growth of rooftop solar, which is empowering consumers to cut their energy bills.
At the same time, manufacturing capacity for all solar PV production segments is expected to more than double to 1,000 GW by 2024, led by China and increasing supply diversification in the U.S., India and Europe. Based on those trends, the world will have enough solar PV manufacturing capacity in 2030 to meet the level of annual demand envisaged in IEA’s Net Zero Emissions by 2050 Scenario.
Wind power additions are forecast to rebound steeply in 2023, growing by almost 70% year-on-year after a difficult couple of years in which growth was slugging. The faster growth is mainly due to the completion of projects that had been delayed by Covid-19 restrictions in China and by supply chain issues in Europe and the U.S.
However, further growth in 2024 will depend on whether governments can provide greater policy support to tackle challenges in terms of permitting and auction design. In contrast to solar PV, wind turbine supply chains are not growing fast enough to meet accelerating demand over the medium-term. This is mainly due to rising commodity prices and supply chain issues, which are reducing the profitability of manufacturers.