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The world is set to add record-breaking renewable capacity additions this year, but it will still need double new annual capacity over the next five years to achieve the net-zero by 2050 scenario, the International Energy Agency (IEA) said on Wednesday.
Nearly 290 gigawatts (GW) of new renewable power will be commissioned in 2021, up by 3 percent compared to the record set in 2020, with solar PV leading the increase, the IEA said in its annual Renewables 2021 Market Report with a forecast to 2026.
But despite the record additions in 2021, and an expected 50-percent increase in renewable capacity additions in 2021-2026 compared to 2015-2020, the industry needs even faster deployment of solar, wind, and all other renewable energy sources if the world still hopes to get on track to meet net-zero by 2050, the IEA said.
“Overall, the forecast for renewable generating capacity remains significantly below the level required for the Net Zero Scenario. For solar PV, average annual additions need to almost double in the next five years compared to what we see in our main case forecast,” the IEA said in the report.
“To achieve the Net Zero Scenario, wind additions also need to more than double those in our main case. Although onshore wind generation costs are cheaper than fossil-fuel alternatives in most countries, non-economic barriers including permitting and social acceptance hamper faster expansion,” the agency noted.
Despite the high commodity and transport prices, renewables are on track for record growth in 2021, the IEA’s Executive Director Fatih Birol said, noting however that “if commodity prices stay high until the end of 2022, it would wipe out 5 years of cost reductions for wind power – and 3 years of reductions for solar PV.”
Since the beginning of 2020, prices for PV-grade polysilicon have more than quadrupled, steel has increased by 50 percent, aluminum by 80 percent, copper by 60 percent, and freight fees have risen six-fold, the IEA has estimated.
“Compared with commodity prices in 2019, we estimate that investment costs for utility-scale solar PV and onshore wind are 25% higher,” the agency added.
Some 100 GW of contracted renewable capacity risks being delayed by commodity price shocks, the IEA notes.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.