Renewable energy additions on track for record high in 2021: IEA

THE world's renewable electricity capacity is expected to rise to more than 4,800 gigawatts (GW) by 2026, a jump of over 60 per cent compared with the levels in 2020.

According to a new report released by the International Energy Agency (IEA) on Wednesday (Dec 1), renewables are likely to account for nearly 95 per cent of the increase in global power capacity from now until the end of 2026.

The Paris-based organisation said that solar power would provide nearly half of that increase.

In 2021 alone, the world will add almost 290 GW of renewable power capacity, with the IEA saying this year will set a new record for new installations.

"This year's record renewable energy additions are yet another sign that a new global energy economy is emerging," said the agency's executive director Fatih Birol.

If the IEA's 2026 predictions do materialise, renewables would be equivalent to the current total global power capacity of fossil fuels and nuclear combined. The proportion of renewables in global electricity generation was 29 per cent in 2020.

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"The high commodity and energy prices we are seeing today pose new challenges for the renewable industry, but elevated fossil fuel prices also make renewables even more competitive." said Birol.

China remains the global leader in the volume of capacity additions, with Europe, India and the United States hot on its heels.

Renewable capacity in South-east Asia is expected to increase by 65 per cent - or about 52 GW - over the next 5 years.

The IEA said this is mostly attributable to an onshore wind investment boom in Vietnam and an acceleration in hydro and geothermal deployment in Malaysia and Indonesia.

Private purchasing power agreements will continue to drive rooftop and floating photovoltaic (PV) installations in Singapore. Solar PV and wind provide the greatest upside potential in South-east Asia, the IEA said.

A relaxation of project ownership requirements in countries like Indonesia and the Philippines could lead to lower renewable costs there, improving their competitiveness against conventional generators. It could also help those countries attract more international financing.

Solar PV remains the powerhouse of growth in renewable electricity, with its capacity additions forecast to increase by 17 per cent in 2021 to a new record of almost 160 GW in 2026.

Over the same 5-year timeframe, onshore wind additions are set to be almost 25 per cent higher on average compared to the 2015-2020 period. Total offshore wind capacity is predicted to more than triple by 2026, the IEA said.

As for biofuels, the agency said total biofuel demand is on track to surpass 2019 levels by the end of this year. The annual demand for biofuels will grow by 28 per cent by 2026 to reach 186 billion litres.

The US leads the way in volume increases, while Asia accounts for nearly 30 per cent of new production over the forecast period, overtaking European biofuel production by 2026.

India's recent ethanol policies, along with blending targets for biodiesel in Indonesia and Malaysia are responsible for most of the growth in Asia. As things stand, India is set to become the third largest market for ethanol demand worldwide by 2026, the IEA said.

"Renewables are the backbone of any energy transition to achieve net zero. As the world increasingly shifts away from carbon emitting fossil fuels, understanding the current role renewables play in the decarbonisation of multiple sectors is key to ensuring a smooth pathway to net zero," the IEA said.