According to the new report, IEA’s renewables growth forecast is 12% higher than projection made in the 2016 report, driven by the realisation of PV installation growth in China and India as well as the US.
The International Energy Agency has highlighted the claimed 50% growth in solar PV installations in 2016, which reached over 74GW, is part of a new trend that showed renewable energy sources with almost two-thirds of net new power capacity that approached 165GW coming online.
Historically, the IEA has significantly underestimated growth in renewables, notably solar PV and its newly renamed report ‘Renewables 2017’ (formerly titled Medium-Term Renewable Energy Market Report) is an attempt to redress fundamental failings over the last decade of forecasts.
According to the new report, IEA’s renewables growth forecast is 12% higher than projection made in the 2016 report, driven by the realisation of PV installation growth in China and India as well as the US. All three countries are projected to account for two-thirds of global renewable expansion by 2022.
“We see renewables growing by about 1,000 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 2022.”
The IEA also recognised PV growth in 2016 also delivered record-low auction prices for electricity generation, which fell as low as 3 cents per kwh (or kilowatt hour), with emerging markets such as the UAE, Mexico and Chile becoming low price leaders.
The recognition in China dominating PV installations, which accounted for around 50% of total in 2016 was another positive but the IEA claimed that the “growing cost of renewable subsidies and grid integration issues remain two important challenges to further expansion.”
China has already exceeded its current five year plan for solar and 2017 is set to be another record year of installations. China is already shifting away from previous tariff arrangements and support for PV is expected to continue at new installation highs.
However, the IEA covered its bets on China, suggesting in further government policy support or reduction in the barriers to renewable energy growth, capacity could be increased by a further 30% in its global forecast, which equated to an extra 1,150 GW by 2022 led by China.