The renewable electricity market has witnessed an unprecedented acceleration in recent years, and it broke another annual deployment record in 2016. The market’s main driver last year was solar photovoltaics, which is boosting the growth of renewables in power capacity around the world.

This is the conclusions of a new report published by the International Energy Agency. The IEA continues:

As costs decline, wind and solar are becoming increasingly comparable to new-build fossil fuel alternatives in a growing number of countries. China remains the dominant player, but India is increasingly moving to the centre stage. Government policies are introducing more competition through renewable auctions, further reducing costs.

Renewable generation closes the gap with coal
By 2022, global renewables electricity generation is expected to grow by over one-third to over 8 000 terrawatts per hour, equal to the total power consumption of China, India and Germany combined. As a result, the share of renewables in power generation will reach 30% in 2022, up from 24% in 2016.

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In the next five years, growth in renewable generation will be twice as large as that of gas and coal combined. While coal remains the largest source of electricity generation in 2022, renewables halve their gap with coal, down to 17% in 2022. Despite slower capacity growth, hydropower will remain the largest source of renewable electricity generation in our forecast, followed by wind, solar PV and bioenergy.

System integration becomes increasingly important
Wind and solar together will represent more than 80% of global renewable capacity growth in the next five years. By 2022, Denmark is expected to be the world leader, with 70% of its electricity generation coming from variable renewables.

In some European countries (Ireland, Germany and the United Kingdom), the share of wind and solar in total generation will exceed 25%. In China, India and Brazil, the share of variable generation is expected to double to over 10% in just five years. These trends have important implications going forward. Without a simultaneous increase in system flexibility (grid reinforcement and interconnections, storage, demand-side response and other flexible supply), variable renewables are more exposed to the risk of losing system value at increasing shares of market penetration since wholesale prices are depressed precisely when wind and solar production exceeds demand.

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A bright future for renewables to 2022, solar PV entering a new era
This record performance in 2016 forms the bedrock of the IEA’s electricity forecast, which sees continued strong growth through 2022, with renewable electricity capacity forecast to expand by over 920 GW, an increase of 43%. This year’s renewable forecast is 12% higher than last year, thanks mostly to solar PV upward revisions in China and India.

Solar PV is entering a new era. For the next five years, solar PV represents the largest annual capacity additions for renewables, well above wind and hydro. This marks a turning point and underpins our more optimistic solar PV forecast which is revised up by over one-third compared to last year’s report. This revision is driven by continuous technology cost reductions and unprecedented market dynamics in China as a consequence of policy changes.

About the IEA report ‘Renewables 2017’
The IEA’s Renewables 2017 provides a detailed market analysis and overview of renewable electricity capacity and generation, biofuels production, and heat consumption, as well as a forecast for the period between 2017 and 2022. This year’s report also provides additional analysis on the contribution of electric vehicles to renewable road transport and on the off-grid solar market in Africa and developing Asia.

The report identifies a set of policy improvements in key markets that could accelerate the growth of renewables in the electricity sector as well as the growth of transport biofuels for the first time. These are needed to accelerate decarbonisation in all sectors in order to be on track to meet long-term climate goals.

Download the report and read more.

Source: IEA