Renewable power installations

Overview:

  • According to the IEA, China will be the key driver of renewable capacity expansion in the next years.
  • While the headline results from Wednesday’s report look to be encouraging, the sector is beset by challenges.

Record of Renewable Power Installations

According to the International Energy Agency, the globe will install about 290 gigawatts of renewable power capacity this year. The Paris-based association expects to establish a new record for new installations in 2021.

The IEA’s Renewables Market Report, released on Wednesday, predicts that global renewable electricity capacity will increase to over 4,800 GW by 2026. When compared to 2020 levels, this represents a 60 percent increase.

The maximum quantity of energy that an installation can produce, not what it is now producing, is referred to as capacity.

According to the IEA, China will be the primary driver of renewable capacity expansion in the future years, followed by Europe, the United States, and India.

In the long run, the IEA predicts that renewables will account for “almost 95 percent of the increase in global electricity capacity until 2026.”

The report stated, “We have revised up our forecast from a year ago.” “As the current record commodity prices are outweighed by increased policy support and ambitious climate targets outlined for COP26.” The cost of constructing new wind and solar PV facilities has risen as a result of these factors.

Solar PV stands for solar photovoltaic, which is a method of turning sunlight directly into electricity.

Fatih Birol, the IEA’s executive director, described the record renewable electricity additions in 2021 as “yet another indicator that a new global energy economy is forming.”

“Significant cost energy and commodity show fresh obstacles for the renewable energy industry,” added Birol, “but higher prices of fossil fuel make renewable products more competitive.”

While the headline results from Wednesday’s report appear encouraging, the industry may be buffeted by a variety of obstacles.

Report by International Energy Agency

Renewables confront a “range of policy uncertainty and implementation hurdles,” according to the IEA research. Permitting and finance are only a few examples, as are grid integration and social acceptance.

“Recent increases in commodity prices have pushed investment expenses higher. In the immediate term, however, the IEA warns, “the availability of raw materials and rising power prices in some countries represent significant problems for wind and solar PV makers.”

Nonetheless, “volatile commodity and transportation prices are projected to have a modest impact on demand.” High prices for fossil fuels also help to enhance the competitiveness of solar PV and wind energy.

The situation is possibly even more difficult when it comes to net-zero goals.

While renewable energy capacity additions are expected to “increase faster than ever in the next five years,” this will not be enough to fulfill the IEA’s 2050 goal of net-zero emissions.

Even the IEA’s “accelerated case,” in which governments address regulatory, policy, and implementation issues, would be insufficient.

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