Story at a glance
- 2021 was a record-breaking year for renewable energy, and nearly 290GW of renewable power will have been commissioned by the end of the year, a 3 percent increase over 2020.
- At the current pace, renewable energy generating capacity will soon equal that of fossil fuels and nuclear power combined.
- High commodity and transportation costs pose some challenges for the renewable energy sector.
Renewable energy growth is set to accelerate over the next five years, according to a new report, driven in part by commitments made by world leaders at the UN’s global climate summit earlier this month.
At its current pace, renewable energy generating capacity will soon equal that of fossil fuels and nuclear power combined, accounting for nearly 95 percent of the increase in global power capacity through 2026, according to an International Energy Agency (IEA) analysis published Wednesday.
That forecast is an upward revision from last year, in part because greater policy support and “ambitious” climate targets announced at COP26 outweigh the increased costs of building installations for renewables.
Nearly 290GW of new renewable power will be commissioned in 2021, a 3 percent increase over 2020’s “already exceptional” growth, the IEA said. Globally, the renewable energy industry expanded at the quickest pace since 1999 in 2020.
Solar power alone will account for more than half of renewable energy expansion this year, followed by wind and hydropower.
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That’s “yet another sign that a new global energy economy is emerging,” IEA Executive Director Fatih Birol said in a press release.
Birol noted that while high commodity and energy prices pose some challenges for the renewable energy sector, prices of fossil fuels have also been climbing rapidly, making “renewables even more competitive.”
Global supply chain disruptions stemming from the pandemic have put significant upward pressure on the cost of raw materials and have caused inventories to tighten.
If commodity and transportation prices remain high through the end of next year, the cost of wind investments would return to 2015 levels, the IEA said, and three years of cost reductions for solar PV would be erased.
But commodity costs are not the main obstacles to growth, Heymi Bahar, lead author of the report, told The Guardian, and permitting for new energy projects and increased policy measures are also needed.
“We need a gear change to meet net zero,” he said. “We have already seen a very important gear change in recent years but we need to move up another gear now. It is possible, we have the tools. Governments need to show more ambition, not just on targets but on policy measures and plans.”
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