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Demand for renewable energy globally soars to new heights

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Demand for renewable energy has soared globally, smashing even the International Energy Agency’s expectations. 

In 2020, despite the economic slump caused by the Covid-19 pandemic, installation of wind and solar power plants grew at the fastest pace in 20 years. Even more surprising is the fact that the IEA is now predicting that the coming years is set to see even more rapid growth, especially as the world recovers from the pandemic. 

While renewable energy has grown in popularity in the last few years, the IEA is now predicting that the installation of renewables will become the ‘new normal’. That’s backed by its upcoming forecasts, with the agency predicting that around 270 GW of renewable capacity is on course to be added in 2021 and almost 280 GW in 2022. For comparison, 2020 saw around 280 GW installed globally, an increase of 45% on 2019. 

Asian nations are largely responsible for the rapid growth in renewables in 2020, with China rapidly rolling out both solar and wind farms all across the country. The rapid pace of installations in the region is the reason Fred Olsen Windcarrier was forced to redeploy a vessel from Moray East in the UK

However, despite this rapid pace of installation in APAC, China is set to slow down over the coming years. The IEA describes this as a ‘transitional slowdown after exceptional 2020 growth’, with Europe and the United States set to pick up the mantle. The agency is predicting the growth in those regions to be even brisker than previously forecast. 

To understand the massive scale of renewable deployments, the IEA says that it was forced to revise its forecasts upwards by more than 25% from its previous estimates in November. It’s possible that with countries around the world becoming more focused on the climate crisis, the pace of renewable installations could grow even faster than even these more optimistic forecasts. 

In fact, the IEA has already said that its forecasts in the United States are based on the extension of federal tax credits. The forecast does not take into account the US administration’s new emissions reduction targets or its infrastructure bill. If enacted, the bill would drive a much stronger acceleration in the deployment of renewables after 2022.

What is causing this increase in renewable energy installation?

Once again, wind power is responsible for a huge chunk of the increase in global renewable capacity. The IEA says that wind capacity has doubled over the last year to 114 GW, although it will likely slow down in 2021 and 2022 as China lifts its foot off the accelerator. 

Solar PV installations will continue to break new records, however, with annual additions forecast to reach over 160 GW by 2022. That would be almost 50% higher than the level achieved in 2019 prior to the pandemic, affirming solar’s position as the “new king” of global electricity markets.

“Wind and solar power are giving us more reasons to be optimistic about our climate goals as they break record after record. Last year, the increase in renewable capacity accounted for 90% of the entire global power sector’s expansion,” said Fatih Birol, the Executive Director of the IEA. 

“Governments need to build on this promising momentum through policies that encourage greater investment in solar and wind, in the additional grid infrastructure they will require, and in other key renewable technologies such as hydropower, bioenergy and geothermal. A massive expansion of clean electricity is essential to giving the world a chance of achieving its net zero goals.’’

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