The International Energy Agency (IEA) has released its Medium-Term Renewable Energy Market Report 2015 today, in which is predicts strong growth for renewable energy globally, driven by technology cost reductions. The IEA anticipates renewables accounting for two-thirds of net additions to generating capacity globally.
Adding in excess of 700 GW, renewable sources will increase share in global electricity generation from 22% in 2013 up to 26% by 2020, in what the IEA describes as a remarkable shift in a very limited period of time.
Solar looks set to play a key role in renewable deployment in this period, being the second-largest source of new capacity, behind onshore wind.
While the forecast may paint a positive picture for renewable deployment, crucially the IEA expects the renewable deployment trend to slow towards 2020, due to a range of factors. The IEA cites persistent policy and market integration uncertainties in some areas, notably Europe and Japan, along with financing challenges and integration issues in developing countries as the major constraining factors.
Because of these factors, IEA believes the level of renewable deployment in its main case forecast will fall short of what is required to effectively meet climate change goals.
Geographically, the IEA anticipates that in OECD countries almost all generation capacity additions will be in the form of renewables. China will be the leading nation in terms of reneawable deployment, itself accounting for 40% of global renewable capacity growth, followed by the EU and the U.S.
Beyond the OECD, renewable deployment in India and Brazil are anticipated to accelerate, with Egypt, Thailand and the Middle East also showing positive signs. Despite this, the IEA notes that market access barriers, grid constraints, policy and market design, or the cost of availability of financing, will limit deployment in these markets.
Solar PV is predicted to make a major impact in Sub-Saharan African nations, where renewables are forecast to meet two-thirds of the growth in demand for power. The IEA notes: affordable small scale solar PV can help access in rural areas and improve electricity provision in urban zones, where grid connected power is not always reliable.
Affordable renewables are set to dominate the emerging power systems of the world, said IEA Executive Director Fatih Birol. With excellent hydro, solar and wind resources, improving cost-effectiveness and policy momentum, renewables can play a critical role in supporting economic growth and energy access in Sub-Saharan Africa, meeting almost two-thirds of the regions new demand needs over the next five years.
In the accelerated case the IEA plots, renewable deployment could be 25% higher than in the main case. The IEA notes that a supportive outcome from the forthcoming COP21 climate negotiations in Paris could create a virtuous cycle for renewable deployment.
The IEA Medium-Term Renewable Energy Market Report 2015 was released at G20 Energy Ministers Meeting.