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IEA Sees ‘Exceptional’ Solar, Wind Growth as ‘New Normal’

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The “exceptional” global growth of solar and wind capacity is set to become a “new normal” in 2021 and 2022, the International Energy Agency says, prompting the epically cautious organization to boost its forecast of future renewables growth by 25%—just six months after it published the last set of figures.

Solar and wind installations grew a “huge” 280 gigawatts (GW), or 45%, despite pandemic restrictions in 2020, for the largest percent increase since 1999, Carbon Brief reports. “Overall, the IEA says renewables accounted for 90% of new electricity generating capacity added globally last year and that they will meet the same share in each of the next two years.”

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The new forecast is 40% higher than the one the IEA published in May 2020, when it expected the pandemic to put a much bigger crimp in new projects. In the latest release, “wind and solar are now expected to surpass even the ‘accelerated case’ outlined by the agency in November 2020,” which called for the two technologies to match global natural gas capacity in 2022, Carbon Brief says.

“Wind and solar power are giving us more reasons to be optimistic about our climate goals as they break record after record,” said IEA Executive Director Fatih Birol. “A massive expansion of clean electricity is essential to giving the world a chance of achieving its net-zero goals.”

He urged governments to “build on this promising momentum” with policies to “encourage greater investment in solar and wind, in the additional grid infrastructure they will require, and in other key renewable technologies such as hydropower, bioenergy, and geothermal”.

The new numbers are particularly significant from an agency that has spent years underestimating the pace of renewable energy growth, and there may be more to come: In a blog post yesterday, the Pembina Institute said the IEA will be releasing a 2050 net-zero roadmap next week, “the first time the agency will publish a full scenario describing how the global energy system could achieve carbon neutrality by 2050.”

Carbon Brief notes that the IEA “has repeatedly raised its expectations for wind and solar over the past decade, drawing fire from critics that say—in the words of a 2019 Reuters article—that it has ‘underplay[ed] the speed at which the world could switch to renewable sources of energy’.” 

The 2020 edition of its World Energy Outlook (WEO), self-described as the “gold standard of energy analysis”, included a “major update to the agency’s assumptions about the costs of financing the construction of wind and solar over the next two decades,” delivering “a significant boost to the agency’s expectations for the growth of renewables.” 

But independent analysts still called the “baby steps” in last year’s WEO a “threat to climate safety”, with Oil Change International analyst Kelly Trout telling The Energy Mix the IEA was giving short shrift to 1.5°C pathways. IEA modeller Bruce Wanner later maintained the agency saw its role as reflecting governments’ current climate policy plans and pushing decision-makers to do more.

Yesterday, Pembina said the IEA “has long been criticized for conservative outlooks that underestimate the rate of adoption of clean energy and fail to provide a clear pathway for keeping global warming below 1.5°.” The Calgary-based institute listed five key features to look for in next week’s IEA release:

• The rate of decline in global oil demand;

• The timeline for decarbonizing electricity systems;

• The degree of electrification required for buildings and transport;

• The degree of reliance on “negative emissions” technologies like carbon capture and storage, and the extent to which actual emission reductions are prioritized;

• The scenario’s treatment of the economic, social, and environmental benefits of the transition off carbon.

Carbon Brief has details on the latest IEA analysis.

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Matt Chester's picture
Matt Chester on May 18, 2021

The new forecast is 40% higher than the one the IEA published in May 2020, when it expected the pandemic to put a much bigger crimp in new projects. In the latest release, “wind and solar are now expected to surpass even the ‘accelerated case’ outlined by the agency in November 2020,” which called for the two technologies to match global natural gas capacity in 2022, Carbon Brief says.

This is eye catching because, as the article notes, IEA has long been chastised by those who are gungho on renewables for being too conservative in their estimates for future installations. And for an organization who is as influential on the markets as IEA, there's always a risk that their predictions are somewhat self-fulfilling prophecies when it comes to where investors see the market going and thus shifting their dollars-- so this change could be doubly noteworthy

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