Renewable energy hits ‘all-time record’ in 2021, but faster deployment needed to reach net zero, warns IEA

‘New global energy economy is emerging’, with high price of fossil fuels making clean power projects increasingly attractive, International Energy Agency says

Solar panels and wind turbines in California. China, India, the US and Europe account for 80 per cent of renewable expansion worldwide (Getty)

Installations of new renewable energy technology are on course to hit an “all time record” in 2021, the International Energy Agency (IEA) has said, but warned the world risks missing its mid-century deadline to reach net zero emissions without even faster deployment.

The renewable energy drive came despite rising costs for key materials needed to make new solar panels and wind turbines, the agency said, highlighting how a new economy was emerging to satisfy global demand.

By the end of the year, additions of new renewable power capacity are expected to rise to 290 gigawatts, surpassing the previous record, set last year, of 280 gigawatts.

The new report suggests that over the next five years renewables will be at the forefront of global energy projects, accounting for almost 95 per cent of the increase in global power capacity, which will rise more than 60 per cent from 2020 levels to over 4,800GW by 2026.

The IEA said on this trajectory, in five years’ time renewable energy would account for the same total global power capacity of fossil fuels and nuclear combined.

The report also highlights the strengthening role solar power is playing, with photovoltaic solar power (solar PV) alone providing more than half of the new capacity due to come online over the next five years.

IEA executive director Fatih Birol said: “This year’s record renewable electricity additions of 290 gigawatts is yet another sign that a new global energy economy is emerging.

“The high commodity and energy prices we are seeing today pose new challenges for the renewable industry, but elevated fossil fuel prices also make renewables even more competitive.”

The IEA’s report comes during an energy crisis in parts of Europe, and directly after warnings that without overhauling the UK energy market, up to 90 per cent of all electricity generation in the UK is on course to be on a government-backed contract.

As a result of prolonged government support, analysts have warned that by 2035, UK energy providers will have “limited incentives” to respond to supply and demand.

China is the leading country in terms of adding new renewable energy capacity, while India is the nation with the highest rate of growth in renewables.

The IEA report said China is expected to reach 1,200GW of total wind and solar capacity in 2026 – four years earlier than its current target of 2030, which could mean the country hits its peak emissions goal earlier than planned.

Meanwhile India will double new wind and solar installations over the next five years compared with 2015-2020.

The IEA said the rollout of solar and wind projects across Europe and the United States is also on track to speed up significantly from the previous five years.

China, India, the US and Europe together account for 80 per cent of renewable capacity expansion worldwide.

Dr Birol said: “The growth of renewables in India is outstanding, supporting the government’s newly announced goal of reaching 500GW of renewable power capacity by 2030 and highlighting India’s broader potential to accelerate its clean energy transition.

“China continues to demonstrate its clean energy strengths, with the expansion of renewables suggesting the country could well achieve a peak in its CO2 emissions well before 2030.”

Addressing the need for a faster shift to renewable energy the IEA said governments could encourage the necessary further growth in the sector by addressing key barriers, such as permitting and grid integration challenges, social acceptance issues, inconsistent policy approaches, and insufficient remuneration.

High financing costs in the developing world are also a major obstacle, the report warned.

The report’s authors said that even in a scenario where many of these challenges are overcome, the shift to renewable will “still fall well short of what would be needed in a global pathway to net zero emissions by mid-century”.

The warnings come as the UK’s target of reaching 40GW of wind power by 2030 looks increasingly in doubt, with analysts saying that hitting this target would require the country to build the equivalent of a 1.2GW offshore wind farm – the largest ever built – every 10 weeks for the next 20 years.