Thanks to their falling costs and continued rapid expansion in emerging economies; Renewables are set to represent the largest source of growth in electricity generating capacity over the next five years, according to the International Energy Agency (IEA)’s Medium Term Renewable Energy Market Report 2015.
This growth means that renewables could result in global electricity generation higher than the combined demand from China, India and Brazil by 2020.
The IEA report says that renewables have the potential to mitigate climate change, and enhance energy security in a cost-effective manner, and that deployment could be eased if some governments address certain policy uncertainties surrounding the use of renewables.
Furthermore, the report states that over the next five years an extra 700 GW of renewable capacity will be connected to grids worldwide; with renewables projected to make up around two-thirds of the total net capacity additions over the same period. Approximately 50% of the forecasted increase will come from non-hydro renewables; such as Wind and Solar PV.
With two-thirds of the expansion of renewables set to take place in emerging economies and developing countries, a big factor in the forecasted growth is due to the costs of renewable energy falling significantly thanks to sustained progresses in technology, improved financing conditions and the expansion of deployment to newer markets with better resources.
The report does go on to highlight financing, regulatory barriers and grid constraints as challenges to be overcome by the renewables industry, with growth boosted by up to 25% if these issues are addressed. Doing so would not only help meet climate objectives, but also bolster the upcoming COP21 climate negotiations.
Fatih Birol, Executive Director of the IEA, stated that “Governments must remove the question marks over renewables if these technologies are to achieve their full potential, and put our energy system on a more secure, sustainable path”.