06 Jun IEA: Renewables expected to rise rapidly with 440GW of new installations this year

According to the latest market update from the International Energy Agency (IEA), renewable energy is due to rise rapidly to 440GW of new capacity this year, a considerable increase of 107GW compared to the previous year, with solar making up over 60% of the total. Fatih Birol, the IEA Executive Director, believes new installations will exceed the combined power capacity of Germany and Spain. The IEA also suggests that in a potential accelerated scenario, new renewables could achieve 550GW. Solar and wind are leading the accelerated expansion of the new global energy economy. Birol explains that the energy crisis has shown how critical renewables are for enabling energy supplies to be cleaner, secure and more affordable and as a result, governments are deploying renewables even faster.

Birol stresses that achieving resilient and strong growth means tackling some significant challenges. These issues aside, wind and solar panels are predicted to supply over 40% of electricity this year in Spain, Germany, Ireland and other EU nations. The latest study indicates that China has consolidated its leading position in the global deployment of renewables, accounting for 55% of new capacity in 2024, increasing from 50% in 2022. By 2024, China is due to deliver nearly 70% of all new offshore wind projects worldwide, over 60% of onshore wind and 50% of global solar projects. The US renewables market is expected to recover from a challenging year in 2022, with increases likely in solar and wind and a significant increase in additional solar capacity.

The IEA states that the increase in solar is driven by the installations of large and small projects, increasing power bills that empower customers in nations like Germany, Italy and the Netherlands to install rooftop solar and reduce energy costs. Accelerated growth in distributed solar is the primary reason for the positive view, accounting for nearly three-quarters of the EU forecasts. This is a result of higher electricity prices, making solar more economically viable and the increased policy support in core EU markets.

Solar manufacturing capacity is on a path to more than double, reaching 1,000 GW by 2024, driven by China and the rise in supply diversification in the US, India and Europe. This increase in production will ensure annual solar demand is met within the IEA landmark scenario for achieving net-zero emissions by 2050. New wind capacity is predicted to grow by 70% compared to 20222 after a few slower years, mainly due to project delays after the pandemic restrictions in China and supply chain challenges in the US and Europe. The IEA explains that in comparison to solar, wind turbine supply chains aren’t developing quickly enough to meet the rising demand. This is mainly because of rising commodity prices and supply chain issues, which impact the profitability of manufacturers.

The IEA renewables forecast has been adapted upwards by 40% from before the events in Ukraine, which resulted in many countries increasing solar and wind uptake to decrease their reliance on Russian natural gas. Dr Evans, the deputy editor of Carbon Brief, explains that recent projections are 24% higher than six months ago and nearly double what was anticipated in 2020.

According to the IEA, the increase in new installations results in savings exceeding £100 billion for EU households between 2021 and 2023 due to replacing more costly fossil fuel generation. Wholesale electricity prices in Europe would have been 8% higher in 2022 without added renewable capacity. The IEA report explains that clean energy, bioenergy, heat pumps, solar thermal and geothermal tech will help Europe displace nearly 8 billion cubic metres of natural gas for heating in the winter. 

While solar and wind are even more competitive than the previous year, government policies must adapt to evolving market conditions, especially for renewable energy auctions. Countries must focus on planning and investment in grids to secure and enable cost-effective integration of variable renewables in power systems.