New solar PV capacity grew by 50% last year,
with China accounting for almost half of the global expansion, according to the
International Energy Agency's latest renewables market analysis and forecast.
For the first time, solar PV additions rose faster than any other fuel,
surpassing the net growth in coal.
Boosted by a strong solar PV market,
renewables accounted for almost two-thirds of net new power capacity around the
world last year, with almost 165 gigawatts (GW) coming online, according to the
new report,
Renewables 2017
(
explore the report here
).
Renewables will continue to have a strong growth in coming years. By 2022,
renewable electricity capacity should increase by 43%.
"We see renewables growing by about
1,000 GW by 2022, which equals about half of the current global capacity in
coal power, which took 80 years to build," said Dr Fatih Birol, the
executive director of the IEA. "What we are witnessing is the birth of a
new era in solar PV. We expect that solar PV capacity growth will be higher
than any other renewable technology through 2022."
This year's renewable forecast is 12%
higher than last year, thanks mostly to solar PV upward revisions in China and
India. Three countries - China, India and the United States - will account for
two-thirds of global renewable expansion by 2022. Total solar PV capacity by
then would exceed the combined total power capacities of India and Japan today.
In power generation, renewable electricity is
expected to grow by more than a third by 2022 to over 8,000 terawatt hours,
which is equivalent to the total power consumption of China, India and Germany
combined. By then,
renewables will
account for 30% of power generation, up from 24% in 2016. The growth in
renewable generation will be twice as large as that of gas and coal combined.
Though coal remains the largest source of electricity generation in 2022,
renewables close the generation gap with coal by half in just five years.
The deployment in solar PV and wind last year
was accompanied by record-low auction prices, which fell as low as 3 cents per
kwh (or kilowatt hour). Low announced prices for solar and wind were recorded
in a variety of places, such as India, the United Arab Emirates, Mexico and
Chile. These announced contract prices for solar PV and wind power purchase
agreements are increasingly comparable or lower than generation cost of newly
built gas and coal power plants.
China remains the undisputed leader of
renewable electricity capacity expansion over the forecast period with over
360GW of capacity coming online, or 40% of the global total. China's
renewables growth is largely driven by concerns about air pollution and
capacity targets that were outlined in the country's 13th five-year plan to
2020. In fact, China already exceeded its 2020 solar PV target three years
ahead of time and is set to achieve its onshore wind target in 2019. Still, the
growing cost of renewable subsidies and grid integration issues remain two
important challenges to further expansion.
Under an accelerated case - where government
policy lifts barriers to growth - IEA analysis finds that renewable capacity
growth could be boosted by another 30%, totalling an extra 1,150 GW by 2022 led
by China. Solar PV and wind capacity in China could by then reach twice the totalpower capacity of Japan today.
India's move to address the financial health
of its utilities and tackle grid-integration issues drive a more optimistic
forecast. By 2022, India renewable capacity will more than double. This growth
is enough to overtake renewable expansion in the European Union for the first
time. Solar PV and wind together represent 90% of India's capacity growth as
auctions yielded some of the world's lowest prices for both technologies.
Despite policy uncertainties at the federal
level, the United States remains the second-largest growth market for
renewables. The main drivers for onshore wind and solar - such as multi-year
federal tax incentives combined with renewable portfolio standards as well as
state-level policies for distributed solar PV - remain strong. Still, the
current uncertainty over proposed federal tax reforms, international trade and
energy policies could alter the economic attractiveness of renewables and hamper
their growth over our forecast period.
The report also provides detailed analysis on
the renewable consumption of electric cars and off-grid solar deployment in
Africa and developing Asia. Off-grid capacity in these regions will more than
triple reaching over 3000 MW in 2022 from industrial applications, solar
home systems (SHSs) and mini-grids driven by government electrification
programmes and private sector initiatives. While this represents less than 5%
of total PV capacity installed in both regions, the economic impact is
nonetheless significant, and brings basic electricity services to almost
70million more people in developing Asia and sub-Saharan Africa in the
next five years.
Power consumption of EVs - including cars,
two- and-three wheelers and buses - is expected to double over the next five
years, with renewable electricity estimated to represent almost 30% of their
consumption by 2022, up from 26% today. EVs play a complementary role to
biofuels, which represent 80% of growth in renewable energy consumption in
transport. However, the share of renewables in total road transport energy
consumption remains limited, increasing only from 4% in 2016 to almost 5% in
2022.