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11 May 2021

Renewables surged in 2020, IEA reports

Power Engineering International
Renewables surged in 2020, IEA reports
New wind and solar grew at their fastest rate in two decades in 2020 with a pace that is set to continue in the coming years.

The International Energy Agency’s latest Renewable Energy Market update finds that renewable capacity additions in 2020 reached almost 280GW, up 45% from the 190GW in 2019 and the largest year-on-year increase since 1999.

This was comprised primarily of solar and wind, with around 135GW and 115GW of capacity respectively, along with 20GW of hydro and about 10GW of other renewables, led by bioenergy.

Policy deadlines in China, the United States and Vietnam were behind this boom, according to the IEA report. China alone was responsible for over 80% of the increase as onshore wind and solar PV projects contracted under the former feed-in tariff scheme and those awarded in previous auctions had to be connected to the grid by the end of 2020.

In the US, wind developers rushed to complete their projects before the expiration of the production tax credit, although it was extended for another year. In Vietnam, phaseout of the feed-in tariff for solar PV projects led to an unprecedented rush in commercial and residential installations.

Nevertheless, these levels are expected to be maintained, with 270GW of renewables projected to become operational in 2021 and 280GW in 2022. With this expansion, renewables are expected to account for 90% of total global power capacity increases in both 2021 and 2022.

Solar and wind will continue to dominate the mix, with hydro expected to reach 30-35GW in 2021 and 2022 and other renewables staying around the 10GW mark.

“Wind and solar power are giving us more reasons to be optimistic about our climate goals as they break record after record. Last year, the increase in renewable capacity accounted for 90% of the entire global power sector’s expansion,” commented Fatih Birol, Executive Director of the IEA.

“Governments need to build on this promising momentum through policies that encourage greater investment in solar and wind, in the additional grid infrastructure they will require, and in other key renewable technologies such as hydropower, bioenergy and geothermal. A massive expansion of clean electricity is essential to giving the world a chance of achieving its net zero goals.”

Solar and wind markets

Looking ahead solar PV capacity additions are expected to increase 8% to over 145GW in 2021 and a further 10% to 160GW in 2022, having become the lowest cost option for electricity generation in many countries.

These will be dominated by utility-scale projects, with rooftop solar nevertheless an important if slightly declining in relative importance component of the market in most regions.

China continues to dominate the market with 50GW in 2021 and 60GW projected for 2022.

India stands out with a tripling of capacity additions expected in 2021 compared with 2020 as delayed utility projects become operational. Moreover, the government awarded 27GW of PV in auctions in 2020. Distributed PV expansion remains sluggish, however, due to administrative and regulatory challenges in multiple states.

Wind, on the other hand, is expected to decline to around 85GW in 2021 and below 80GW in 2022.

Policy uncertainty in China is one factor and another is the completion of projects in the US. However, Europe’s onshore wind growth is expected to accelerate in 2021 and 2022 and record-breaking capacity additions are expected in Latin America.

While the decline in wind is dominated by that of onshore wind, offshore wind is expected to show an increase. A 60% increase to 8GW is projected for 2021 followed by a decrease to about 7.5GW in 2022, again due to policy deadlines in China.

The IEA notes that the forecasts have been revised upwards by more than 25% from its previous estimates in November as governments around the world have auctioned record levels of renewable capacity and companies have signed record-level power purchase agreements.

 

Read the IEA’s Renewable Energy Market Update 2021

 


This story was originally published on Power Engineering International

 

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