Thursday, April 18, 2024

Renewable energy will overtake coal by 2025, International Energy Agency predicts

Renewables will overtake coal to become the world’s largest source of electricity generation by early 2025 as the global energy crisis drives an extraordinary acceleration in solar and wind power, the International Energy Agency has predicted.

The amount of electricity generated by wind turbines and solar panels will more than double in the next five years and account for almost 20 per cent of global power generation by 2027, the agency said. That will boost total renewable power output, including hydropower, to some 38 per cent of the global electricity mix, it estimates, up from 28 per cent last year.

Coal’s share of global electricity supplies will decline from 36 per cent last year to 30 per cent by 2027, and natural gas from 23 per cent to 21 per cent.

The agency, which is based in Paris, said it had increased its forecasts for how much wind and solar would be built globally as the energy crisis driven by Russia’s invasion of Ukraine and curtailment of gas supplies to Europe drives “a sharp acceleration in installations of renewable power”. More than 90 per cent of power generation capacity installed globally in the next five years will be renewable, it predicts.

It is now forecasting that installed capacity of renewables will grow by 2,400 gigawatts over the next five years, a 30 per cent bigger increase than it was forecasting only a year ago.

“Renewables were already expanding quickly, but the global energy crisis has kicked them into an extraordinary new phase of even faster growth as countries seek to capitalise on their energy security benefits,” Fatih Birol, the agency’s executive director, said. “The world is set to add as much renewable power in the next five years as it did in the previous 20 years.”

The agency was founded in 1974 as a forum for energy co-operation among OECD countries in the wake of the oil price shock. It publishes regular reports on the state of the energy market.

Russia’s curtailment of gas supplies to Europe, in retaliation for western sanctions imposed since its invasion of Ukraine, has caused a spike in fossil fuel prices and an unprecedented global energy crisis. This has prompted many governments to rethink their strategies and look to greener alternatives.

Europe in particular is doubling down on renewables and is now forecast to install twice as much capacity by 2027 as it did in the previous five-year period, as energy security concerns turbocharge existing climate ambitions.

China, the US and India are also all stepping up their deployment of green electricity in response to the crisis. China will account for almost half of new renewable power capacity globally in the next five years.

“The current energy crisis can be a historic turning point towards a cleaner and more secure future world energy system,” Birol said. “Renewables’ continued acceleration is critical to help keep the door open to limiting global warming to 1.5C.”

However, the report added that the growth in wind and solar power would bring challenges: supply chain issues will have to be resolved, power networks expanded and more flexible power resources developed “to securely manage larger shares of variable renewables”.