Authorization
On January 11, 2024, the International Energy Agency (hereinafter referred to as the IEA) presented its another Report “Renewables 2023. Analysis and forecast to 2028”.
“The new IEA report shows that under current policies and market conditions, global renewable capacity is already on course to increase by two-and-a-half times by 2030. It’s not enough yet to reach the COP28 goal of tripling renewables, but we’re moving closer – and governments have the tools needed to close the gap,” these words of the IEA’s Executive Director Fatih Birol summarize the essence of this year's Report.
Thus, the amount of renewable energy capacity added to energy systems around the world grew by 50% in 2023, reaching almost 510 GW, with solar PV accounting for three-quarters of additions worldwide. Such a growth is primarily due to China's policy which commissioned as much solar PV in 2023 as the entire world did in 2022, while its wind power additions rose by 66%. The increases in renewable energy capacity in Europe, the United States and Brazil also hit all-time highs.
At the same time, the IEA provides less optimistic forecasts for further wind power development worldwide when China is excluded, due to constant supply chain disruptions, higher costs, and long permitting process. The challenges facing the industry particularly affect offshore wind, with investment costs today more than 20% higher than only a few years ago. In 2023, developers have cancelled or postponed 15 GW of offshore wind projects in the United States and the United Kingdom. On the other hand, the IEA repeatedly refers to the Wind Energy Charter and the Wind Energy Action Plan (package) adopted in Europe and notes that if governments follow the measures set out in these recently adopted documents, the situation will soon stabilize.
In contrast with solar PV, wind supply chain development in the medium term is expected to remain closely aligned with demand. Manufacturing capacity for the main wind turbine components (nacelles, blades and towers) remained mostly unchanged in 2023, at about 110-125 GW per year. Announced expansion projects indicate that by 2025 it will increase to about 120-140 GW.
An interesting feature of this report is the IEA's analysis of the likelihood of implementing all the green hydrogen projects that have been announced worldwide. So, of all the projects announced worldwide to use renewables to produce hydrogen this decade, only 7% of the proposed capacity is expected to come online by 2030. The slow pace of projects reaching an investment decision combined with limited appetite from off-takers and higher production costs have led to slower progress on many projects.
Moreover, in 2023, the role of biofuels has also come to the fore. Emerging economies, led by Brazil and India, are expected to drive 70% of global demand over the next five years as biofuels start to show their true potential in carbon-intensive and hard-to-abate sectors such as air- and sea travel.
Despite the temporary difficulties in the global wind power sector, as well as the slow pace of development of the hydrogen and bioenergy industries, an estimated 96% of newly installed, utility-scale solar PV and onshore wind capacity had lower generation costs than new coal and natural gas plants in 2023. According to the IEA, wind and solar energy will become even more competitive in terms of cost from year to year, making the energy transition in the world inevitable.
In general, under existing policies and market conditions, global renewable capacity is forecast to reach 7 300 GW while renewable electricity generation is expected to reach around 14 400 TWh by 2028. In other words, this growth trajectory would see global RE capacity increase to 2.5 times from its current level by 2030, falling short of the tripling goal approved in COP28. But, IEA convinced that governments can close the gap to reach over 11 000 GW by 2030 by overcoming current challenges and implementing existing policies more quickly.
Report: https://iea.blob.core.windows.net/assets/3f7f2c25-5b6f-4f3c-a1c0-71085bac5383/Renewables_2023.pdf
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