By 2022, renewables will grow by more than a third, surpassing 8,000 TWh — equivalent to the total electricity consumption of China, India and Germany combined. Solar power is recording the highest growth.
The capacity of solar power from new installations over the past year grew by 50 per cent compared to the previous year, with China accounting for approximately half of the expansion at a global level. For the first time, solar photovoltaic has grown faster than any other energy source, surpassing even the installed capacity of coal. This is what emerges from the latest "Renewables 2017" report by the International Energy Agency (IEA) on market analysis and forecasts. Growth forecasts for renewables this year show a +12 per cent compared to last year, thanks above all to the upwardly revised solar development plans of China and India.
Three countries – China, India and the United States – will account for two thirds of the global expansion of renewable energy by 2022, when total photovoltaic capacity will surpass the electrical power installed today in Japan and India combined.
In electricity generation, renewables are expected to grow by more than a third by 2022, surpassing eight thousand terawatt-hours (TWh), equivalent to the total electricity consumption of China, India and Germany combined. Renewables will thus increase from the current 24 per cent to 30 per cent of global energy production within five years. The growth of renewable generation will be twice that of gas and coal combined, although coal will still remain the largest source of electricity generation in 2022. Three countries – China, India and the United States – will account for two thirds of the global expansion of renewable energy by 2022, when total photovoltaic capacity will surpass the electrical power installed today in Japan and India combined.
The rollout of solar photovoltaic and wind power in 2016 was accompanied by auction prices at record lows, with costs below 3 cents per kWh. The lowest prices were recorded in the United Arab Emirates, Mexico and Chile. These prices are increasingly close to those of electricity generated from fossil fuels, and are in any case lower than the generation costs of new-generation gas and coal plants.
China remains the undisputed leader in renewable electricity capacity expansion with over 360 GW of installed capacity, representing 40% of the global total. The growth of renewables in the Land of the Rising Sun is largely driven by concerns over air pollution and green energy development targets for 2020 set out in the 13th Five-Year Plan. China reached its 2020 solar development target three years ahead of schedule and will very likely also meet its wind energy deployment targets as early as 2019. The cost of subsidies and grid integration issues remain two major challenges to be addressed, but despite these difficulties, solar photovoltaic and wind capacity could reach twice the installed capacity in Japan today within five years.
India too has strong development forecasts by 2022, to the extent that the IEA estimates that renewable capacity will more than double and will surpass the installed capacity of the European Union. Solar and wind will account for 90% of the growth in new electricity capacity.
Despite political uncertainty at the federal level, the United States ranks second only to China in renewable energy development. The main drivers for onshore wind and solar development – such as the multi-year federal tax credit, incentives and state-level policies for solar energy distribution – remain quite strong today. However, the current uncertainty surrounding federal tax reform and international trade and energy policies could alter the economic appeal of green energy in the United States and hamper its growth.
The Agency's report also provides an analysis of solar generation in off-grid systems in developing countries in Asia and sub-Saharan Africa. Off-grid capacity in these regions will triple by 2022, reaching over 3,000 MW, thanks to industrial applications, solar home systems and mini-grids driven by government electrification programmes and private sector initiatives.
Although the installed capacity will represent less than 5 per cent of total photovoltaic capacity installed in both regions, the economic impact will nonetheless be significant, providing electricity for basic services to nearly 70 million people over the next five years.
Energy consumption by electric vehicles – cars, two- and three-wheelers and buses – is expected to double over the next five years, and 30 per cent of this demand will be met with renewable energy. Electric vehicles today play a complementary role to biofuels, which account for 80% of the growth in renewable energy consumption in transport. The fact remains, however, that the share of renewable energy in total energy consumption for road transport is still extremely limited, rising from 4% in 2016 to nearly 5% in 2022.