Landmark Report | IEA: 2021 Renewable Energy Report—Analysis and Projections to 2026
Release time:
2021-12-05
Renewable energy is the cornerstone of achieving a net-zero energy transition. As the world increasingly moves away from fossil fuels that emit carbon, a thorough understanding of the role renewable energy currently plays in decarbonizing various sectors is crucial for ensuring a smooth transition to net-zero emissions.
Renewable energy is the cornerstone of achieving a net-zero energy transition. As the world increasingly moves away from fossil fuels that emit carbon, a thorough understanding of the role renewable energy currently plays in decarbonizing various sectors is crucial for ensuring a smooth transition to net-zero emissions.
Despite the continued rapid deployment of renewable energy worldwide during the COVID-19 pandemic, renewables are now facing both new opportunities and fresh challenges. The newly released “2021 Renewable Energy Report” provides an in-depth analysis of current policy and market dynamics, placing the recent surge in energy and commodity prices in context. In addition to offering detailed market analyses and forecasts, the report also explores several noteworthy trends, including energy storage, the use of renewable electricity for hydrogen production, stimulus measures, aviation biofuels, and residential heating.
The report shows that global renewable electricity is growing at a faster pace than ever before, and new energy sources can support the emergence of a global green economy.
The new UN Climate Conference, COP26, has set forth stronger policies and higher climate targets, further driving renewable energy to reach new records. However, faster deployment across all critical sectors and industries remains essential if we are to achieve net-zero goals. In the coming years, global capacity for solar photovoltaic modules, wind turbines, and other renewable technologies will accelerate, with 2021 expected to see a new record in installed capacity. Despite rising costs of key materials used to manufacture PV modules and wind turbines, this year’s newly added renewable energy capacity is projected to grow to 290 GW—surpassing last year’s already historic high.
Photovoltaics and wind power continue to be the main drivers of growth.
IEA Executive Director Fatih Birol stated: “This year’s record-breaking 290 GW of new renewable power capacity is yet another sign that a new global energy economy is emerging. While the current high prices of commodities and energy pose new challenges for the renewable energy sector, the rising costs of fossil fuels are also making renewable energy more competitive.”
By 2026, global renewable energy generating capacity is projected to increase by more than 60% over 2020 levels, reaching over 4,800 GW—equivalent to the combined current installed capacity of fossil fuels and nuclear power worldwide. By 2026, renewables will account for nearly 95% of the global increase in electricity capacity, with solar photovoltaic alone making up more than half of that total. The additional renewable energy capacity added between 2021 and 2026 is expected to be 50% higher than the capacity added from 2015 to 2020. This growth is driven by stronger government policies as well as more ambitious clean-energy targets announced before and after the COP26 climate conference.
Compared to the period from 2015 to 2020, renewable energy growth is expected to increase in all regions.
China remains the global leader in new installed capacity: By 2026, the total installed capacity of wind and solar power is expected to reach 1,200 GW—four years ahead of the current target set for 2030. India is also experiencing remarkable growth in renewable energy, with the government recently announcing a new target of 500 GW of installed renewable energy capacity by 2030.
The report predicts that, despite today’s persistently high prices for commodities and transportation, renewable energy will still experience record-breaking growth.
Annual growth in installed capacity of renewable energy power under the main-case and accelerated-case scenarios for the period 2021–2026.
The report argues that governments can further accelerate the growth of renewable energy by addressing several key barriers, including permitting issues, challenges in grid integration, social acceptance concerns, inconsistent policy trajectories, and inadequate remuneration. High financing costs in developing countries also pose a significant obstacle. Moreover, in the report’s Accelerated Case—assuming that some of these barriers are overcome—annual new installed capacity of renewable energy during the period up to 2026 would be one-quarter higher than the projections in the Main Case, reaching an average of over 380 gigawatts per year.
However, even this faster deployment still falls far short of what’s needed to stay on track for achieving net-zero emissions by mid-century. This means that during the period from 2021 to 2026, additional renewable energy capacity will still be required—almost twice the amount projected in the main case discussed in this report. It also implies that demand for biofuels will need to grow at an average rate four times higher than that projected in the main case, while demand for renewable heat will need to increase threefold.
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