Renewables was the only energy source for which demand increased in 2020 during the pandemic, according to the IEA.
The exceptional level of renewable energy capacity additions is expected to be maintained, with 270GW becoming operational in 2021 and 280GW in 2022, it notes. Policy deadlines in China, the United States and Vietnam spurred an unprecedented boom in renewable capacity additions last year, and renewables now account for 90% of new power capacity expansion globally.
The report also found solar PV development will continue to break records, with annual additions reaching 162 GW by 2022 – almost 50% higher than the pre-pandemic level of 2019. Global wind capacity additions increased more than 90% in 2020 to reach 114 GW. While the pace of annual market growth slows in 2021 and 2022, it is still 50% higher than the 2017-2019 average.
The report also found:
- Annual growth in China's renewables market will decelerate following the exceptional expansion that resulted from developers rushing to complete projects before subsidy phase-outs. However, the rest of the world compensates for China’s slowdown and maintains the pace of renewables expansion.
- Europe’s capacity growth accelerates thanks to further policy support and a booming corporate PPA market as PV costs continue to decline.
- The updated forecast for the United States is more optimistic because of federal tax credit extensions. New US emissions reduction targets and the infrastructure bill, if passed, will boost renewables expansion after 2022
- Although India’s capacity additions in 2020 declined almost over 50% from 2019, the country is expected to set new records for renewables expansion in 2021 and 2022 as delayed projects from previous competitive auctions are commissioned.
Transport biofuel production is expected to rebound to 2019 volumes in 2021, after having fallen 8% in 2020. Production is also forecast to expand another 7% in 2022, the report states.
Driven by clean fuel standards and policy support in the US, global Hydrotreated Vegetal Oil (HVO) production capacity is expected to nearly double in the next two years, significantly expanding the capability of producing biofuels from waste and residue feedstocks.
To read the Top 10 factors powering the renewables market, click here