The IEA issues medium-term market reports every year. This year’s report on renewable energy foresees 13% greater growth than the agency was expecting this time last year, after a 15% rise in the amount of power capacity generated from renewable sources in 2015. It now predicts energy from solar, wind and other forms of generation will remain the fastest growing source of electricity, rising to a 28% share of the market in 2021 compared with 23% in 2015.
The reasons for the growth are varied. The fight against climate change has created secure markets for renewable energy, but the fight against air pollution has also played a part. Security of energy supply is also a factor, especially in parts of the world where fossil fuels come from troubled regions.
The IEA’s director Fatih Birol said: ‘We are witnessing a transformation of global power markets led by renewables, and the centre of gravity is moving to emerging markets like Asia. Last year was one of records for renewables, and our projections for growth over the next five years are more optimistic. However, even these higher expectations remain modest compared with the huge untapped potential of renewables.’
The IEA report says there are still reasons to be cautious. It highlights that progress in transport remains slow and needs significantly stronger policy efforts, indeed policy uncertainty persists in too many countries, which is slowing down the pace of investment in renewable energy. From a European perspective it is worrying that the US is going to overtake Europe as the second largest investor in renewable power capacity. The slower growth rate in Europe is caused by uncertainty as the post-2020 renewables policy is under review.