The International Energy Agency released a new report titled “Renewables 2023”, a primary analysis of the renewable sector based on policy trends and current developments in the market. IEA forecasts that by 2028, renewable energy technologies will be deployed in the electricity, transport, and heat sectors.
IEA has also launched an online dashboard that maps the data to measure renewable energy deployment through 2028.
Here are some of the key findings and forecasts:
Solar PV market
2023 saw a massive leap in renewable energy, with China leading the global solar power market. The total renewable energy additions increased by almost 50% to about 510 gigawatts (GW); this is the fastest increase in the last 20 years. In 2023, China installed as much solar power as the entire world did in 2022. Solar power alone made up three-quarters of all the new renewable energy additions worldwide.
Tripling renewable energy
At the recently concluded COP28, countries pledged to triple renewable energy capacity this decade. They seek to increase the world’s renewable energy capacity to 11,000 GW by 2030. IEA notes that under the existing policies and market conditions, it would reach 7,300 GW by 2028, falling short of the tripling goal.
IEA lists out the challenges under four main categories:
1) policy uncertainties and delayed policy responses to the new macroeconomic environment
2) insufficient investment in grid infrastructure prevents faster expansion of renewables
3) cumbersome administrative barriers and permitting procedures and social acceptance issues
4) insufficient financing in emerging and developing economies
IEA notes that by addressing these challenges, there could be a 21% higher growth of renewables and can help push the world back on track to meet the tripling goal.
Energy milestone
IEA reports that over the coming five years, several renewable energy milestones are expected to be achieved:
- In 2024, wind and solar PV together generate more electricity than hydropower.
- In 2025, renewables will surpass coal to become the largest source of electricity generation.
- Wind and solar PV each surpass nuclear electricity generation in 2025 and 2026, respectively
- In 2028, renewable energy sources account for over 42% of global electricity generation, with the share of wind and solar PV doubling to 25%.
China: World’s renewables powerhouse
IEA reports that China will account for almost 60% of the world’s new renewable capacity by 2028, and in the same year, nearly half of China’s electricity generation will come from renewable energy sources.
Supportive policy environments and the deployment of onshore wind and solar PV have helped the country reach the position of the world’s renewable powerhouse.
The forecast also shows that China is expected to reach its national 2030 target for wind and solar PV installations by 2024, six years ahead of schedule.
China will play a crucial role in achieving the worldwide aim of tripling renewable energy, as it is anticipated that China will set up over half of the new capacity needed globally by 2030.
Onshore wind & solar PV growth
New solar panels and onshore wind turbine additions in the US, the EU, India, and Brazil are predicted to more than double by 2028 compared to the last five years.
- In the EU and Brazil, rooftop solar PV is expected to grow faster than large-scale plants as people and businesses aim to cut high electricity costs.
- In the US, the Inflation Reduction Act has prompted additions to clean energy.
- India is also expected to accelerate growth in the onshore wind and solar PV sectors via auction and private players.
- Policy incentives are driving renewable energy growth in the Middle East and North Africa.
Offshore wind industry
Outside of China, the outlook for adding offshore wind capacity is less positive. In Europe and North America, the wind industry faces challenges by supply chain disruptions, higher costs, and lengthy and time-consuming permitting processes.
IEA notes that the offshore wind has been hit hardest, and its growth outside China has been revised down by 15% through 2028.
Offshore wind is also affected by the high investment costs. The cost is now over 20% higher than just a few years ago. In 2023, 15 GW of offshore wind projects in the US and the UK were canceled or delayed.
However, the global share of solar PV and wind in electricity generation is expected to double to 25% by 2028.
In the European Union, annual variable renewables penetration in 2028 is expected to reach more than 50% in seven countries, with Denmark having around 90% of wind and solar PV
in its electricity system by that time.
Hydrogen-based fuel
Between 2023 and 2028, the amount of renewable power capacity dedicated to hydrogen-based fuel production is expected to increase by 45 GW. This represents only about 7% of the total announced project capacity for that period.
IEA notes that China, Saudi Arabia, and the US together will contribute to over 75% of the renewable capacity dedicated to hydrogen production by 2028.
Biofuel expansion
Led by Brazil, emerging economies will dominate the global expansion of biofuels, which is expected to grow 30% faster than in the past five years. These economies are projected to contribute to 70% of global biofuel demand growth.
IEA forecasts that Brazil alone will be responsible for 40% of the anticipated biofuel expansion by 2028.
Worldwide, biofuels and renewable electricity used in electric vehicles are predicted to offset 4 million barrels of oil equivalent per day by 2028.
