IEA says 2023 will be record year for new renewable power capacity additions

Published on June 05, 2023 by Dave Kovaleski

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A new report from the International Energy Agency (IEA) projects that global additions of renewable power capacity will increase by about one third this year.

Specifically, IEA’s Renewable Energy Market Update said global renewable capacity additions are set to soar by 107 gigawatts (GW) this year, the largest increase ever. Overall, the total will climb to more than 440 GW in 2023. The growth is due to several factors including growing policy momentum, higher fossil fuel prices, and energy security concerns, among others.

The expansion is taking place across the world’s major markets. In Europe, renewables are at the forefront of its response to the energy crisis, while new policy measures are driving significant increases in the United States and India. China, meanwhile, accounts for almost 55 percent of global additions of renewable power capacity in both 2023 and 2024.

The growth is expected to continue in 2024, when the world’s total renewable electricity capacity is anticipated to rise to 4,500 gigawatts (GW).

“Solar and wind are leading the rapid expansion of the new global energy economy. This year, the world is set to add a record-breaking amount of renewables to electricity systems – more than the total power capacity of Germany and Spain combined,” IEA Executive Director Fatih Birol said. “The global energy crisis has shown renewables are critical for making energy supplies not just cleaner but also more secure and affordable – and governments are responding with efforts to deploy them faster. But achieving stronger growth means addressing some key challenges. Policies need to adapt to changing market conditions, and we need to upgrade and expand power grids to ensure we can take full advantage of solar and wind’s huge potential.”

Solar PV additions will account for about two-thirds of this year’s increase in renewable power capacity. The expansion of large-scale solar PV plants is being accompanied by the growth of smaller rooftop solar systems. Manufacturing capacity for all solar PV production segments is expected to more than double to 1,000 GW by 2024. The report said the world will have enough solar PV manufacturing capacity in 2030 to comfortably meet the level of annual demand.

Wind power additions are forecast to rebound by almost 70 percent in 2023, following a couple of difficult years. The growth is mainly due to the completion of projects that had been delayed by Covid-19 restrictions in China and by supply chain issues in Europe and the United States.

In Europe, the forecast for renewable capacity additions was revised upwards by 40 percent following Russia’s invasion of Ukraine. This attack led many countries to boost solar and wind uptake to reduce their reliance on Russian natural gas. Newly installed solar PV and wind capacity is estimated to have saved EU electricity consumers EUR 100 billion during 2021-2023 by displacing more expensive fossil fuel generation. Wholesale electricity prices would have been 8 percent higher in 2022 without the additional renewable capacity.