Global renewables are heading to surpass 4TW, with a cumulative total of 3.9 TW having been installed by the start of the year, according to IRENA, the International Renewable Energy Agency, this growth being led by China now at 1.45 TW. And the International Energy Agency (IEA) is quite optimistic about the future. In its Renewable 2024 review, it says that global renewable capacity is expected to grow by 2.7 times by 2030, although it warns that still falls short of ‘tripling’, as was agreed as a goal by nearly 200 countries at the COP28 climate summit.
The IEA says that ‘considering existing policies and market conditions, our main case sees 5,500 gigawatts (GW) of new renewable capacity becoming operational by 2030. This implies that global renewable capacity additions will continue to increase every year, reaching almost 940 GW annually by 2030 – 70% more than the record level achieved last year. Solar PV and wind together account for 95% of all renewable capacity growth through the end of this decade due their growing economic attractiveness in almost all countries.’
New solar capacity added between now and 2030 will account for 80% of the growth in renewable power globally by the end of this decade, and, ‘despite recent supply chain and macroeconomic challenges, the wind sector is expected to recover.’ The IEA forecast sees the rate of global wind capacity expansion doubling between 2024 and 2030 compared with 2017-23.
However, not everything grows so rapidly. Although hydropower capacity growth remains stable, driven by China, India, the ASEAN region and Africa, the role of other renewables, including bioenergy, geothermal, CSP and ocean energy, is expected to decline ‘due to a lack of policy support’. And on the heat side, solar thermal and heat pumps have not done as well as hoped with growth slowing. District heating decarbonisation potential ‘remains largely untapped outside of the European Union,’ while global heat demand is expected to ‘outpace renewable heat growth, leading to more use of fossil fuels and a 5% rise in annual carbon dioxide emissions from the sector from 2024 to 2030.’ Also, surprisingly, renewables’ share in transport only rose two percentage points to 6% in 2030.
Perhaps even more surprisingly, and possibly linked to it, the IEA doesn’t see green hydrogen use expanding rapidly. ‘Despite increased policy support, hydrogen produced from renewable energy is set to account for just 4% of total hydrogen production in 2030, mainly due to insufficient demand creation. While global installed electrolyser capacity is expected to increase fifty-fold by the end of the decade, only part of it will be supplied by new renewable power plants.’ Overall, hydrogen production is forecast to drive ‘only 43 GW of new renewable capacity by 2030, or less than 1% of total global renewable capacity expansion’.
In terms of who will dominate in the energy transition, the IEA says that China is ‘set to cement its position as the global renewables leader’, accounting for 60% of the expansion in global capacity to 2030. It is forecast to be home to ‘every other megawatt’ of all renewable energy capacity installed worldwide in 2030, after surpassing its end-of-the-decade 1,200 GW target for solar PV and wind six years early. The European Union and the United States are both forecast to double the pace of renewable capacity growth between 2024 and 2030, while, the IEA predicts, India will see the fastest rate of growth among large economies.
All of this will be costly. S&P Global Commodity Insights forecast that technology investments will reach nearly $1 trillion by 2030, with, like the IEA, S&P being bullish about renewable progress. They predict that, ‘despite rising costs of offshore wind and hydrogen, oversupply and falling raw material prices will ensure that the average cost of clean energy technologies continues to decline in 2024’. They add that the costs for solar and batteries has fallen from their 2022 highs and ‘as these technologies account for the vast majority of capacity additions, the average cost of adding clean energy technologies to the grid will continue to fall by another 15%-20% by 2030’.
There is certainly no shortage of bold predictions like this, with most also predicting that China will take the lead. For example, as I noted in an earlier post, the US Rocky Mountain Institute (RMI) have said that ‘clean technologies will continue to follow S-curves, cascading across sectors and geographies,’ but with China, the world’s largest energy consumer, in the lead. It explained that ‘China, lacks oil and gas, and cleantech is a path to leadership, clean air, and zero emissions’.
RMI’s conviction that China is ‘the pivot nation in the transition away from fossil fuels’, and certainly it’s good to see that wind & solar have now overtaken coal in generation capacity terms there. A big step. But it still has a way to go the get emissions down, with energy demand still rising, and although some progress is being made, coal still plays a major role. And, more generally, not everyone is enamoured of their wider politics.
In terms of technology progress, around the world, some of the optimists technology projections may also come unstuck. As S&P warn, in some cases, ‘first-of-their-kind projects are costing much more than expected and benefits of scale have not yet materialized’. Green hydrogen production may not expand as fast as some had predicted, although the IEA Hydrogen report says there may be short-term incentives to go for blue hydrogen from fossil fuels with CCUS. But not everyone agrees with that approach, or the use of fossil derived hydrogen as a vehicle e-fuel. Most green would prefer to focus on zero carbon green hydrogen produced using renewable power, for example as a long term storage option for grid balancing.
Obviously there will be divergencies in approach on this and other issues around the world, with the pace of renewable growth varying. But there no questioning that renewables generally are booming globally and that China is in the lead, with the IEA’s executive director Fatih Birol noting that ‘China’s solar expansion is now proceeding at such a rate that, by the early 2030s – less than 10 years from now – China’s solar power generation alone could exceed the total electricity demand of the United States today.’ And it’s interesting that, although it is still there and expanding a bit in the IEA scenario, nuclear gets fewer mentions these days. Indeed, much like the RMI, the IEA Renewables 2024 report seems to see renewables winning hands down...Just as WNISR also says- see my last post. Maybe it’s really true then- renewables will dominate! But also China...
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