Strong government policies, technological improvement and environmental concerns are driving global renewable energy growth, according to an International Energy Agency report published Tuesday.
In the IEA’s Medium-Term Renewable Market Report, the world’s leading energy agency increased its five-year growth forecast for renewables by 13 percent compared to its outlook last year. The IEA predicted that renewables will be the fastest-growing source of electricity generation over the next five years, rising from 23 percent of world capacity in 2015 to 28 percent in 2021.
The agency said renewable energy surpassed coal last year as the energy source with the greatest number of new installations. With 153GW added, renewables represented more than half of new power capacity around the world. Wind accounted for 66GW and solar 49GW.
Commitments like the COP21 agreement in Paris, cost reductions for wind and solar and emerging markets’ move away from pollutant energy sources are driving this growth, the report said.
“We are witnessing a transformation of global power markets led by renewables and, as is the case with other fields, the center of gravity for renewable growth is moving to emerging markets,” Faith Birol, IEA’s executive director, said in a statement.
Strong policies from the world’s leading economies played a large part in the forecast’s increase, the report said. Prime examples it cited include the US’s agreeing to extend renewable energy tax credits, and the pledge made at COP21 to limit global warming to 2 degrees Celsius by cutting carbon emissions.
Cost reductions thanks to technological improvements are helping add more renewables around the world, according to the IEA. It expects the price of solar PV to drop by a quarter over the next five years, and 15 percent for onshore wind. The report said half a million solar panels were installed everyday around the world last year.
Commitment from emerging markets, like China and India, to fight pollution is also important for increasing renewable energy capacity. In China, an average of two wind turbines were installed every hour in 2015, amounting to around half of all wind additions globally. More broadly, the country accounted for 40 percent of all renewables capacity increases.
The agency did warn that policy uncertainty still exists in many countries, which could slow down the pace of investments. It also said intermittent production for turbines, during lulls in the wind; and solar PV, at night or under cloudy conditions, are obstacles to complete grid integration.