【Report】 IEA releases “Renewables 2023” report

In January 2024, the International Energy Agency (IEA) released a new report “Renewables 2023”. This report noted that the world added 50% more renewable capacity in 2023 than in 2022, reaching almost 510 gigawatts (GW). Solar PV accounted for three-quarters of the added amount of renewable energy capacity in the world, and the largest growth took place in China, which commissioned as much solar PV in 2023 as the entire world did in 2022.

In addition to China, renewable energy capacity in Europe, the United States and Brazil also hit all-time highs. The report indicated that these increasing trends would continue and forecasted global renewable power capacity to grow to 7,300 GW over the 2023-28 period. Solar PV and wind are expected to account for 95% of the expansion, with renewables overtaking coal to become the largest source of global electricity generation by early 2025.

The report noted that, under current policies and market conditions, a 2.5-fold increase in the amount of renewable energy capacity worldwide can be expected by 2030, but such an amount is still not enough to achieve the goal agreed to at COP28 of tripling global renewable energy generation by 2030. For this, global capacity would need to reach at least 11,000 GW.

The keys to achieving this goal are not only to promote the expansion of renewable energy in almost all countries, but also to provide finance and support for the expansion of renewable energy in emerging countries. The report pointed out increasing finance and expanding renewable energy in emerging and developing countries as the biggest challenge, while noting that what is needed to reach the collective target to triple renewables by 2030 varies widely by country, region and technology.

Following is a summary of the report:

Positive outlook on renewable energy

  • Renewable capacity additions continued in 2023, driven by China’s solar PV market.
  • The global power mix will be transformed by 2028.
  • China accounts for almost 60% of new renewable capacity expected to become operational globally by 2028. Solar PV and onshore wind additions through 2028 is expected to more than double in the United States, the European Union, India and Brazil compared with the last five years.
  • In 2023, spot prices for solar PV modules declined by almost 50% year-on-year, with manufacturing capacity reaching three times 2021 levels.
  • The current manufacturing capacity under construction indicates that the global supply of solar PV will reach 1,100 GW at the end of 2024.
  • In 2023, 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 2028, renewable energy sources are expected to account for over 42% of global electricity generation, with the share of wind and solar PV doubling to 25%.

Current issues with renewable energy

  • In 2023, new renewable energy capacity financed in advanced economies was exposed to higher base interest rates than in China and the global average for the first time.
  • The implications of this new macroeconomic environment are wide-ranging for both governments and industry.
  • The renewable energy industry, particularly wind, is grappling with macroeconomic challenges affecting its financial health.
  • Offshore wind has been hit hardest by the new macroeconomic environment, with its expansion through 2028 revised down by 15% outside China.
  • Faster deployment of variable renewables increases integration and infrastructure challenges.

In addition, in a special section, the report also discussed green hydrogen (hydrogen produced from renewable energy), renewable heat, and biofuels.

Renewable power capacity dedicated to hydrogen-based fuel production is estimated to grow by 45 GW between 2023 and 2028, representing only an estimated 7% of announced project capacity for the period. The report noted that the main reason was the slow pace of bringing planned projects to final investment decisions due to a lack of off‑takers and the impact of higher prices on production costs.

It is expected that demand for biomass fuels, whose role has attracted attention, will grow continuously in emerging economies, led by Brazil, at a rate 30% faster than in the past five years. The IEA forecasts that emerging countries will drive 70% of global biofuel demand growth, supported by robust biofuel policies, increasing transport fuel demand and abundant feedstock potential, over the five-year period 2023-2028. Electric vehicles (EVs) and biofuels are proving to be a powerful promotor for reducing oil demand, but they have not reached the tripling of biofuel demand by 2030, as indicated in the IEA’s Net Zero Emission (NZE) scenario. The report noted it is impossible to significantly accelerate biofuel deployment through new policies and addressing supply chain challenges.

Renewable heat consumption is estimated to expand by 40% globally during 2023-2028, rising from 13% to 17% of total heat consumption. However, the trends toward 2028 are still insufficient to put the world on track to meet Paris Agreement goals.

Finally, along with this report, the IEA also released their “Renewable Energy Progress Tracker” report. This provides tracking data toward the goal of triple renewable energy, historical data and forecasts at the regional and national level.

The global generation capacity of renewable energy has significantly increased in the past 30 years. This is great news, but the Progress Tracker shows that renewable energy will only account for 29% of global electricity generation in 2022, and 42% in 2028. To achieve decarbonization with limited time, further expansion of renewable energy is urgently required.

Related Links

Press Release:Massive expansion of renewable power opens door to achieving global tripling goal set at COP28 (Link)
Report download : Renewables 2023, Analysis and forecasts to 2028 (Link)
YouTube Movie : IEA Renewables 2023

Written/Published: International Energy Agency (IEA)
Published: January 11, 2024