By Anders Lorenzen
The world’s premier energy trend forecaster, The International Energy Agency (IEA), have in a new energy forecast made their, to date, most optimistic forecast for renewables, predicting an energy market dominated by renewables.
IEA are normally conservative in their estimates, and they have previously been blamed for being too pessimistic in their assessment of renewables. So taking this into account, it is a great boost for the renewable energy sector.
In IEA’s latest edition of their annual Medium-Term Renewable Market Report, (see graphic below) they predict that renewables will be growing more than 13% between 2015 – 2021. They base their findings on the emergence of stronger policy backing in China, the US, India and Mexico. Part of this transition will also involve a decrease in the costs, as solar PV is expected to drop by a quarter, and onshore wind is also expected to drop significantly by 15%.
The report highlights that 2015 witnessed a turning point for renewables. They accounted for more than half of new power capacity added around the world, with wind and solar being main drivers of that. Globally, renewables have now reached a staggering 153 gigawatts (GW) capacity, a 15% increase from 2014, with wind adding 66 GW and solar 49 GW.
These stats are backed up by remarkable renewable energy installation facts. They show that each day last year, half a million solar panels were installed. And in China, which accounts for half of this growth, two wind turbines are erected each day.
According to Dr Faith Birol, IEA Executive Director, this shows how energy markets across the world are rapidly changing: “We are witnessing a transformation of global power markets led by renewables and, as is the case with other fields, the centre of gravity for renewable growth is moving to emerging markets.”
This transition is showing no signs of slowing down. During the next five years, renewables will remain the fastest-growing source of electricity generation. Renewables are expected to represent 60% of the growth in the electricity sector, and they will rapidly begin to close the gap on coal.
But the report warns that caution must still remain, as in too many countries policy uncertainty hampers growth. Also, the rapid progress in wind and solar is creating system integration problems. And it is important to point out that these promising figures reflect electricity only. Progress on renewables in the heat sector and transport sector is painstakingly slow and needs strong policy initiatives and efforts.
IEA is also worried that the sharp rise of renewables in Asia is not enough, and represents only a portion of the regions fast-paced rise in electricity demand.
Faith Birol says that while these figures are highly encouraging, they only represent a fraction of the potential for renewables, and the IEA will be working with governments across the world to maximise the potential.
These optimistic forecasts are of course not new. Forecasters like Bloomberg New Energy Finance (BNEF) have previously made similar bold forecasts. But it is the first time that IEA has been so optimistic about renewables. This will delight green campaigners but worry fossil fuel interests.