Renewables are set to dominate the construction of new power infrastructure in the coming years as costs continue to fall, according to a new report by the International Energy Agency (IEA).
In it main 2020 report, the Paris-based intergovernmental agency anticipates, the IEA has wind, solar, hydro and other renewable sources accounting for 95% of the increase in the world’s electricity generating capacity over the next five years.
Solar capacity, which the IEA recently described as offering – in the best cases – the “cheapest…electricity in history”, is set to be the key driver of this trend.
In the new report’s main scenario, 130GW of solar will be added each year between 2023-2025 and this rises to 165GW in the accelerated scenario, which would account for nearly 60% of the total renewable expansion across this period.
Wind is also expected to expand considerably, but its contribution will be smaller than solar.
Overall, in the IEA’s main scenario, wind and solar capacity is set to double between 2020 and 2025. The chart below shows this, as well as what the IEA calls two “milestones” when solar and wind combined overtake, in turn, gas and coal capacity.
This increase in capacity means renewable generation will expand by almost 50% over the next five years, pushing their share of electricity generation to a third and, as IEA executive director Dr Fatih Birol puts it, “ending coal’s five decades as the top power provider”.
Overall, renewable electricity generation by this point will be nearly 9,745 terawatt hours (TWh) – “equivalent to the combined demand of China and the European Union”, according to the agency.
As power demand goes up around the world to accommodate economic growth and increasingly electrified societies, the IEA expects renewables to meet virtually all of this increase.
Its report forecasts renewables meeting 99% of the increase in electricity demand over the next five years. This can be seen in the chart below.
In the US and Europe, renewable increases are expected to far exceed demand as they are brought in to replace ageing fossil fuel infrastructure.
However, in Asian nations renewables will only cover some of the future demand, with the remainder covered by fossil fuels.