Another record year for renewables, led by solar

4 October 2017

Renewables, boosted by a very strong solar market, accounted for almost two-thirds of net new power capacity around the world last year, with almost 165 GW coming online, according to the International Energy Agency’s analysis and forecast in its report Renewables 2017. Renewables will continue to exhibit strong growth in the coming years. By 2022, renewable electricity capacity should increase by 43%.
New solar PV capacity grew by 50% last year, with China accounting for almost half of the global expansion. For the first time, solar PV additions rose faster than any other fuel, exceeding the net growth in coal.
"We see renewables growing by about 1000 GW by 2022, which equals about half of the current global capacity in coal power, which took 80 years to build," said Dr Fatih Birol, the executive director of the IEA. "What we are witnessing is the birth of a new era in solar PV. We expect that solar PV capacity growth will be higher than any other renewable technology through to 2022."
This year's renewable forecast is 12% higher than last year, thanks mostly to solar PV upward revisions in China and India. Three countries – China, India and the United States – will account for two-thirds of global renewable expansion by 2022.
In power generation, renewable electricity is expected to grow by more than a third by 2022 to over 8000 terawatt hours, which is equivalent to the total power consumption of China, India and Germany combined. By then, renewables will account for 30% of power generation, up from 24% in 2016. The growth in renewable generation will be twice as large as that of gas and coal combined. Though coal remains the largest source of electricity generation in 2022, renewables will halve the generation gap with coal in five years.
The deployment in solar PV and wind last year was accompanied by record-low auction prices, which fell as low as 3 cents per kwh. Low announced prices for solar and wind were recorded in several countries, including India, the United Arab Emirates, Mexico and Chile. These announced contract prices for solar PV and wind power purchase agreements are increasingly comparable to, or lower than, generation cost of newly built gas and coal power plants.
China remains the leader of renewable electricity capacity expansion over the forecast period with over 360 GW of capacity coming online, or 40% of the global total. China's renewables growth is largely driven by concerns about air pollution and capacity targets that were outlined in the country's 13th five-year plan to 2020. In fact, China is set to achieve its onshore wind target in 2019. But the growing cost of renewable subsidies and grid integration issues remain two important challenges to further expansion.
In an accelerated case – where government policy lifts barriers to growth – IEA analysis finds that renewable capacity growth could be boosted by another 30%, totalling an extra 1150 GW by 2022, led by China. Solar PV and wind capacity in China could by then reach twice the total power capacity of Japan today.
The report also provides detailed analysis on the renewable consumption of electric cars and off-grid solar deployment in Africa and developing Asia. Off-grid capacity in these regions will more than triple reaching over 3 000 MW in 2022 from all applications. While this represents less than 5% of total PV capacity installed in both regions, the economic impact is nonetheless significant, and brings basic electricity services to almost 70 million more people in developing Asia and sub-Saharan Africa in the next five years.
Power consumption of EVs - including cars, two- and-three wheelers and buses - is expected to double over the next five years, with renewable electricity estimated to represent almost 30% of their consumption by 2022, up from 26% today. EVs play a complementary role to biofuels, which represent 80% of growth in renewable energy consumption in transport. However, the share of renewables in total road transport energy consumption remains limited, increasing only from 4% in 2016 to almost 5% in 2022.



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