News and data highlighting the inevitable growth of renewable energy in the U.S. and world energy markets continues to flow at an ever-increasing rate. In recent weeks, the International Energy Agency (IEA) said it was significantly increasing its five-year growth forecast for renewables thanks to strong policy support in key countries and sharp cost reductions.
According to IEA’s latest edition of its Medium-Term Renewable Market Report, over the next five years, renewables will remain the fastest-growing source of global electricity generation, with the expected share growing to 28 percent in 2021 compared to the 23 percent that was projected in 2015.
The intergovernmental agency now sees renewables growing 13 percent more between 2015 and 2021 than it did in last year’s forecast, due mostly to stronger policy backing in the United States, China, India and Mexico. Also, costs are expected to drop over that forecast period by a quarter in solar PV and 15 percent for onshore wind.
Meanwhile, in the United States, the latest quarterly market report from the American Wind Energy Association (AWEA) shows that sector has reached 75 gigawatts (GW) of installed capacity and has more than 20 GW of wind power capacity currently under construction or in advanced development (one GW equals 1,000 megawatts). U.S. wind capacity, which stood at 11.6 GW 10 years ago, has seen an annual growth rate of more than 25 percent.
The IEA says 2015 marked a turning point for renewables on the world stage. Wind, solar, biomass, geothermal and hydropower represented more than half of the new power capacity installed around the world, reaching a record 153 GW, which is 15 percent more than 2014. Most of the gains were driven by record-level wind additions of 66 GW and solar PV additions of 49 GW.
About half a million solar panels were installed every day around the world last year. In China, which accounted for about half the wind additions and 40 percent of all renewable capacity increases, two wind turbines were installed every hour in 2015. Renewables surpassed coal last year to become the largest source of installed power capacity around the world.
The IEA cites several factors driving the growth, including more competition, enhanced policy support in key markets and technology improvements. Given the dropping costs of renewable energy, the agency points out that climate change mitigation – while a powerful driver for renewables – is not the only cause for rapid growth of the industry.
As global electricity generation grows, renewables are expected to represent more than 60 percent of the increased supply over the five-year forecast period. Renewable energy is expected to exceed 7,600 terrawatt hours by 2021 – equivalent to the total electricity currently generated by the United States and the European Union together.
It should be noted that some renewable energy advocates insist that the IEA, even with the higher projection through 2021, still underestimates the growth forecasts, arguing that the exponential growth experienced over the past two years can be sustained as costs continue to drop. Nonetheless, all parties, including the IEA acknowledge that 2015 was an exceptional year.
However, the IEA also cautions that policy uncertainty persists in too many countries, slowing down the pace of investments. The agency points out that the rapid progress in variable renewable technology such as wind and solar PV is exacerbating system integration issues in a number of markets, as demonstrated, for example, by the ongoing net-metering debates taking place before state public utility commissions across the United States in recent years.
The IEA also says progress in renewable growth in the transportation sector remains slow, and needs significantly stronger policy efforts – a sentiment echoed in an International Renewable Energy Agency report released last week that suggested that advanced biofuels are the only practical alternative to fossil fuel for airplanes, ships and heavy freight trucks, but need policies and business models that can ensure production facilities continue to be built and their costs continue to decline.
Examples of the type of policy-supported growth discussed in the IEA’s report can be seen in updates like AWEA’s quarterly analysis announced last week in Iowa, which recognized the state for generating more than a third of its electric power from wind. The state is also the nation’s leading biofuel producer. Furthermore, Texas – an oil and natural gas producing giant – is on the verge of being the nation’s leader in solar market development.
These milestones are being reached because of strong, forward-thinking policy makers who recognize the economic, environmental and energy security benefits that come from renewables. The 25x’25 Alliance urges policy makers at the federal, state and local levels to follow the lead of these far-sighted groundbreakers and help bring renewable energy fully into the mainstream.