Solar leads the way as renewables boom – IEA report

A new report from the International Energy Agency estimates that 440GW of renewables will be added globally in 2023, with solar PV providing the bulk of new capacity.  

According to the IEA’s June 2023 Renewable Energy Market Update, this record growth in renewables has been driven by higher fossil fuel prices, energy security concerns, and major policy programmes. In the US, the Inflation Reduction Act has provided renewable energy with a strong investment framework, while the EU’s proposed Net-Zero Industry Act will look to do likewise on this side of the Atlantic. Meanwhile, China is set to account for almost 55 per cent of additional global renewable power capacity in both 2023 and 2024.

Solar PV will account for two-thirds of this year’s increase in renewables and the IEA expects solar to keep growing in 2024. As well as large-scale solar PV plants, rooftop systems have grown significantly too, as households seek to reduce both bills and carbon emissions. Manufacturing capacity for solar PV production is expected to more than double to 1000GW by 2024 and is on track to meet the IEA’s Net Zero Emissions by 2050 Scenario.

This contrasts with wind power, where turbine supply chains are not growing fast enough to match accelerating demand over the medium term, according to the IEA. Despite this, additional wind capacity grew 70 per cent year-on-year in 2023 following a difficult period where COVID impacted windfarm deployment.

“Solar and wind are leading the rapid expansion of the new global energy economy,” said Fatih Birol, IEA executive director. “This year, the world is set to add a record-breaking amount of renewables to electricity systems – more than the total power capacity of Germany and Spain combined.

“The global energy crisis has shown renewables are critical for making energy supplies not just cleaner but also more secure and affordable – and governments are responding with efforts to deploy them faster. But achieving stronger growth means addressing some key challenges. Policies need to adapt to changing market conditions, and we need to upgrade and expand power grids to ensure we can take full advantage of solar and wind’s huge potential.”

The IEA estimates that newly installed solar PV and wind capacity has saved EU electricity consumers €100bn during 2021-2023 by displacing more expensive fossil fuel generation. Wholesale electricity prices in Europe would have been eight per cent higher in 2022 without the additional renewable capacity, according to the new report.

While countries such as Spain, Germany and Ireland will see wind and solar’s combined share of their annual electricity generation rise above 40 per cent by 2024, the IEA believes grid investment remains a key barrier for renewables in Europe and across the world.