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Last year was marked by major shift changes in the global power mix, like onshore wind and solar photovoltaics (PV) achieving lower generation costs than coal and natural gas plants, but there is still a long way to go to reach global renewable energy (RE) targets in line with climate change concerns, the latest International Energy Agency report asserts.
‘Renewables 2023’, the IEA’s global renewable sector analysis for 2023, assesses current policies and market developments and provides forecasts until 2028.
“Global annual renewable capacity additions increased by almost 50% to nearly 510 gigawatts (GW) in 2023, the fastest growth rate in the past two decades,” the report noted, driven in large part by China’s solar PV market, which commissioned as much solar PV as the rest of the world in the previous year. In fact, the report stated that China would account for nearly 60% of the additional RE capacity expected to come online by 2028.
Other markets that saw significant RE growth last year include the United States, the European Union, India, and Brazil. RE growth in the US was credited to the Inflation Reduction Act’s green energy tax credits, while in Europe and Brazil, the growth was spurred by growth in rooftop solar PV. In the Middle East and North Africa region, the report noted that policy incentives were driving down costs and increasing the competitiveness of solar and wind, but that the region was still lagging in terms of its RE potential and electrification needs.
The IEA report stated that the majority (96%) of the world’s newly installed onshore wind and solar PV plants in 2023 recorded lower generation costs than new plants fuelled by coal and natural gas, while 75% of new wind and solar plants were able to provide cheaper fuel than existing fossil fuel facilities.
While the report shared positive findings on the growth of renewable energy in 2023, it also flagged a number of challenges to reaching COP28’s target of tripling global renewable energy capacity by 2030 to help keep the global temperature limit of 1.5°C within reach and avoid the worst effects of climate change.
“Under existing policies and market conditions, global renewable capacity is forecast to reach 7 300 GW by 2028. This growth trajectory would see global capacity increase to 2.5 times its current level by 2030, falling short of the tripling goal,” the report stated.
The IEA recommended that governments prioritise a speedy resolution of their respective challenges and the implementation of necessary policies. Policy uncertainty, insufficient investment in grid infrastructure, administrative barriers like permitting procedures, and insufficient financing in the developing world were among the major challenges to achieving the global renewable energy goal by 2030.