A record amount of renewable electricity has been added to energy systems around the world in 2021, but there is still about half of what is needed each year to be on track to achieve net zero emissions by 2050, according to the International Energy Agency.
New renewable energy capacity is expected to reach 290 gigawatts this year, surpassing last year’s record of 280 GW, the IEA said in its annual renewable energy review. This compares to the current fossil fuel and nuclear power capacity of 4,800 GW.
However, rising commodity prices, which raised the costs of producing and transporting solar panels and wind turbines, threatened to undermine short-term investments, according to the report.
The global energy supply shortage “is certainly a setback, but at the same time it shows us the way out,” Fatih Birol, head of the IEA, told FT.
As commodity prices and energy bills have skyrocketed, oil and gas suppliers such as Russia’s Gazprom have announced record profits and expect further hikes.
But renewable energy sources have remained “much more competitive” than fossil fuels, and “nuclear is about to make a comeback in many countries,” Birol said. âA new global energy system is emerging.
Efforts to replace fossil fuels with clean energy sources should not be blamed for soaring costs, he said.
The recent COP26 climate conference sent an âunequivocal signalâ to investors that the fossil fuel era was beginning to draw to a close, despite a last-minute wording change to the pledge to âphase outâ coal rather than “phasing out” pollutants. energy source.
The latest IEA report predicts that the growth of renewable electricity will accelerate faster than ever. Within five years, its total capacity is expected to exceed 4,800 GW, more than 60% above 2020 levels, and the equivalent of all current global fossil and nuclear fuel capacities combined.
Stricter national climate policies and clean energy targets meant that renewables would account for nearly 95% of the increase in global electricity capacity by 2026, according to the report.
The IEA also predicts that China, the world’s largest emitter, will meet its 1,200 GW clean energy target four years ahead of its 2030 target, and may also peak in carbon emissions before the target date. from 2030.
India, meanwhile, was set to double its new renewable electricity installations by 2026, compared to 2015-2020, according to the report.
Despite these advances, renewable capacities would still be “well below” what would be needed to put the world on track for net greenhouse gas emissions by mid-century, the agency concluded. .
Globally, annual renewables capacity additions over the years to 2026 are expected to nearly double to be on track, compared to what should be installed, the IEA said.
In addition, if commodity prices were to remain high in 2022, new costs for wind power could reach levels last seen in 2015, while declines in installation costs for solar power in the United States. the past three years could be reversed, according to the report.
To accelerate the shift to clean energy, governments have had to increase their support for renewable energy and provide investment incentives, Birol said. Policymakers should also think about how they could phase out fossil fuel power plants early, he said.
âIt is important that financial institutions and developed countries help [developing nations] to “buy back” some of the coal-fired power stations, “Birol said.
At COP26 in Glasgow, developed countries entered into an $ 8.5 billion partnership with South Africa to help the country shut down coal-fired power plants faster than expected.
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