International Energy Agency (IEA) has released its medium-term renewables market report which predicts 43% increase in renewable energy capacity in the next five years.
The report, titled Renewables 2017, foresees continued strong growth of renewable energy through 2022, with renewable electricity capacity forecast to expand by over 920GW, an increase of 43%.
In 2016, renewables accounted for almost two-thirds of net new power capacity around the world, with almost 165GW coming online. The market’s main driver last year was solar photovoltaics, which is boosting the growth of renewables in power capacity around the world, the report states.
This year’s renewable forecast is 12% higher than last year, mostly due to solar PV upward revisions in China and India, IEA said.
By 2022, global renewables electricity generation is expected to grow by over one-third to over 8TWh, equal to the total power consumption of China, India and Germany combined.
As a result, the share of renewables in power generation will reach 30% in 2022, up from 24% in 2016, according to IEA.
In the next five years, growth in renewable generation will be twice as large as that of gas and coal combined, the report predicts.
Coal will remain the largest source of electricity generation in 2022, according to the report, but renewables will halve their gap with coal down to 17% in 2022.
For the next five years, IEA said that solar PV will represent the largest annual capacity additions for renewables, well above wind and hydro.
China has been foreseen as undisputed renewable growth leader in the next five years, while the United States remain the second-largest growth market for renewables.
By 2022, India is expected to more than double its current renewable electricity capacity, and for the first time, this growth over the forecast 2017-2022 period is higher compared with the European Union.
In the European Union, renewable growth over the forecast period is 40% lower compared with the previous five-year period.
Overall, weaker electricity demand, overcapacity, and limited visibility on forthcoming auction capacity volumes in some markets remain challenges to renewable growth, while policy uncertainty beyond 2020 remains high, according to IEA.
However, if adopted, the new EU Renewable Energy Directive covering the post-2020 period would address this challenge by requiring a three-year visibility over support policies, thereby improving the market’s predictability, IEA said in its latest report.