The world’s renewable energy grew at its fastest rate in the past 25 years in 2023, the International Energy Agency (IEA) reported on January 11 in its first assessment since nations agreed at COP28 in December 2023 on ambitious new targets to slow dangerous climate change.
The Paris-based agency said rapid growth of solar in China was the main driver as the world added nearly 510 GW—enough to power nearly 51 million homes for a year—with Europe, the United States, and Brazil also seeing record growth.
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IEA Executive Director Fatih Birol said renewable energy is on course to increase by 2.5 times by 2030. That would fall short of the tripling that nations agreed on at COP28 in Dubai, but Birol said the goal is reachable. Increasing funds for clean energy in developing countries is the biggest challenge to getting to 11,000 GW from the nearly 3,400 GW of 2022, he said. “Success in meeting the tripling goal will hinge on this,” he added.
Countries set a goal of limiting global warming to 1.5°C (2.7°F) at the 2015 Paris climate talks to avert the worst consequences of climate change. Earth is just below that limit, with scientists, on January 9, reporting 2023 was the hottest year on record and projecting that January 2024 will be so warm that a 12-month period will exceed the 1.5-degree threshold for the first time.
For the first time in nearly three decades of such talks, the final agreementin Dubai mentioned fossil fuels—coal, oil, and natural gas—as the cause of climate change and said the world needs to be “transitioning away” from them. But it did not set any concrete requirements to do so.
The report forecasts that solar power and onshore wind energy deployment through 2028 is expected to more than double in the US, the European Union, India, and Brazil, compared with the last five years. The IEA expects 3,700 GW of clean energy capacity to be added by 2028 across 130 countries, with solar and wind energy accounting for almost all of it.
China, already the global leader in renewable energy, will likely account for 60 per cent of the new clean energy capacity that will become operational by 2028. China’s role is crucial in reaching the 2030 goal because it is expected to install more than half of the new capacity required globally by the end of the decade, the IEA said.
IEA researchers found that prices for solar components in 2023 declined by almost 50 per cent year-on-year. They predict that cost reductions and fast deployment will continue in 2024 as manufacturing exceeds demand. However, over the past year, higher inflation and interest rates have also increased equipment and financing costs of renewables projects and policies have been slow to adjust to the new macro-economic environment.
IEA found that wind energy is facing more challenges, especially outside China, which has the world’s largest wind energy capacity. The agency cited issues including supply chain disruptions, higher costs and red tape preventing faster installations.
Despite many announcements of green hydrogen projects—where hydrogen is produced by using renewable energy to split water and heralded as a cleaner fuel for energy intensive industry and transport—progress is slow, with only 7 per cent of current projects expected to come online by 2030, the IEA added.
The report finds that the key challenges to clean energy growth in developed countries are policy uncertainties, fragile economic environments, insufficient investment in electricity transmission grids to accommodate greater shares of renewables, and bureaucratic permitting procedures and administrative barriers.
The key challenges in developing countries are access to finance for installing renewable energy and the lack of strong governance and regulatory frameworks that would reduce risks and attract investments in clean energy.
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“In the absence of any help for African and low-income countries in Asia and Latin America, they will not be able to reach their clean energy targets. That will be a fault line in reaching the 2030 goal,” said Birol.
Tripling by 2030 will also depend on countries speeding up permitting and building out transmission and storage infrastructure, said Sean Rai-Roche, a policy advisor at climate think tank E3G who has long tracked developments in clean energy. “Governments and businesses need to act now to protect the planet for future generations,” Rai-Roche said. “We cannot afford to wait—action later is too late.”
(With inputs from AP and Reuters)
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