IEA: Renewable Energy Capacity Additions Set Another Record

Global renewable energy capacity is growing unevenly, according to the latest renewables forecast published by the International Energy Agency (IEA). In its analysis, the IEA shows that though renewables are being adopted at higher rates than ever, China is leading in adding capacity, and some sources of renewables are lagging behind others.

Additions to renewable capacity increased to a new record for the 22nd consecutive year, according to the report Renewables 2023: Analysis and Forecast to 2028. According to the report, global capacity increased by approximately 50 percent in 2023, reaching almost 510 gigawatts (GW) of power.

Two renewable energy sources, wind and solar, experienced the largest growth in capacity from 2022 to 2023. The total generation capacity for wind power grew by 107.8 GW and solar capacity increased by 374.9 GW.

The bulk of the increased capacity can be attributed to major projects in China, which has outpaced the rest of the world in renewable energy growth. According to the IEA, China has been focused on increasing solar in wind installations. In 2023, China’s wind power capacity increased by 66 percent, and the country commissioned more solar projects than the rest of the world did in 2022.

Causes for the delayed development outside of China can be attributed to four categories: policy problems, lack of grid investments, administrative and social barriers, and financing challenges. If efforts are not made to overcome these challenges, total renewable capacity is expected to amount to 7,300 GW by 2028, which is insufficient to meet global targets.

However, the report notes that renewable capacity is expected to grow more in the next five years than it has in the past 100, primarily because of wind and solar power. The growth is supported by policies favoring and promoting both sources of energy, which are forecast to outperform hydropower, coal, and nuclear power capacities by 2028.

One source of renewable energy, green hydrogen, is facing more headwinds than previously expected. According to the forecast, green hydrogen, which is hydrogen produced using renewable energy in place of fossil fuels, is expected to grow in capacity by just 45 GW from now through 2028. These estimates are lower than previous expectations, primarily driven by economic insecurities and the lack of an existing hydrogen market.

The U.S. and other countries have put an emphasis on developing hydrogen as a clean energy source that can help decarbonize the industrial and long-range transportation sectors, but the technology is lacking acceptance from end users, who have concerns about bringing down the price of green hydrogen to make it economically feasible. Tax incentives offered by the Biden administration may it more cost-effective, but it appears that its acceptance will take some time.