Renewable Energy Capacity Grew 45% in 2020

05.12.21 | Blog | By:

The big story in the International Energy Agency’s (IEA) new Renewables Outlook is in renewable energy. Renewable sources of electricity such as wind and solar grew at their fastest rate in two decades in 2020 and are set to expand in coming years at a much faster pace than prior to the pandemic, according to IEA. The growth in Europe and the U.S. will be “even brisker” than previously forecast, IEA says, compensating for China’s transitional slowdown after exceptional 2020 growth.

Despite the pandemic, IEA says that the amount of renewable electricity capacity added in 2020 rose by 45% in 2020 to 280 gigawatts (GW), the largest year-on-year increase since 1999. The increase in 2020 is set to become the “new normal”, with about 270 GW of renewable capacity on course to be added in 2021 and almost 280 GW in 2022, despite a slowdown in China after an exceptional level of additions last year. In the U.S., if the Biden Administration’s infrastructure bill is enacted by Congress, that will accelerate deployment of renewables after 2022.

An “exceptional” 90% rise in global wind capacity additions led the expansion. Also underpinning this record growth was the 23% expansion of new solar PV installations to almost 135 GW in 2020, according to IEA.  Although China has accounted for 40% of global renewable capacity growth for several years already, for the first time in 2020 it was responsible for 50% – a record level resulting from the unprecedented peak in new installations in December, IEA says. The figure below shows renewable capacity addition changes from 2019 to 2020.

Source: IEA, May 2021

IEA notes that although the amount of annual wind capacity additions is expected to decrease in 2021-2022 after the exceptional jump last year in China, 80 GW of annual installations are still anticipated globally, i.e., almost 35% more than in 2019. Continuous growth in solar PV additions, spurred by lower investment costs and ongoing policy support, partly compensates for lower wind capacity additions. IEA expects annual solar PV expansion to reach 145 GW in 2021 and 162 GW in 2022, breaking records and accounting for almost over 55% of all renewable energy expansion this year and next. The acceleration of hydropower additions through 2022 is driven by the commissioning of mega-scale projects in China. Meanwhile, expansion in other renewables, led by bioenergy, remains stable and represents 3% of total new renewable capacity additions. New renewable capacity additions by technology for the years 2020-2022 are shown in the figure below.

Source: IEA, May 2021

Global biofuel production is expected to recover to the 2019 level in 2021, as forecast in Renewables 2020, but this recovery will be uneven. Biodiesel and hydrotreated vegetable oil (HVO) production increases globally and ethanol expands in India. HVO capacity is also expected to be 50% higher in 2021 than in 2020 if new projects are built on schedule. However, the ongoing effects of the Covid‑19 crisis on demand, as well as price uncertainty for ethanol relative to sweeteners in Brazil, continue to keep ethanol production in both the U.S. and Brazil below the 2019 levels, IEA notes. Biofuel production is expected to be 7% higher in 2022 than in 2021 owing to HVO and biodiesel expansion in the United States and Indonesia, and a return to 2019 ethanol production levels in Brazil. The figure below shows biofuel production by country/region and by fuel type.

Source: IEA, May 2021

U.S. policies are behind 85% of HVO capacity additions globally, as the renewable fuel standard, California’s low-carbon fuel standard and a biodiesel blender credit make HVO projects economically attractive. Outside the United States, new projects will expand capacity 12% from 2020 to 2022 in Europe, and by 32% in the Asia-Pacific region. At full production capacity HVO facilities account for 11% of forecast global biofuel production in 2022, more than doubling the 2019 HVO share.

Source: IEA, May 2021

 

 

Print Friendly, PDF & Email