• The growth of renewable energy is accelerating, says a new report.
  • But governments need to show more ambition to achieve net-zero emissions by 2050.
  • And we need to start right now and be on track by 2026 to have a chance of success.

The rate at which the world is building its renewable energy capacity is accelerating, but we need to pick up the pace dramatically if we are to get to net-zero emissions by 2050, according to a progress report from the International Energy Agency (IEA).

To stay on target for 2050, global renewable energy capacity needs to be 80% higher than the current rate of growth by 2026, says the IEA. Solar and wind capacity alone needs to double over the next five years, according to its Renewables 2021 - Analysis and Forecast to 2026 report.

“To get renewables on track with net zero by 2050, governments not only need to address current policy and implementation challenges but also increase ambition for all renewable energy uses,” says the IEA, adding it’s still important to focus on cutting emissions elsewhere.

The 2021 edition of the World Economic Forum’s Energy Transition Index, which tracks the world’s progress towards clean energy, found that while 92 of the 115 nations studied had improved their score over the past 10 years, only around 10% had made consistent progress.

The report said the findings showed “the need for renewed focus and resilience to meet the climate goals of the next decade”, and called for “coordinated, multi-stakeholder action to achieve an effective energy system evolution”.

Here are five things the IEA report tells us about renewables today.

1. Better policies and COP26 goals will propel renewable electricity to new heights

a chart showing that additions of renewable power capacity are on track to set yet another annual record in 2021.
Additions of renewable power capacity are on track to set yet another annual record in 2021.
Image: IEA

A record amount of new renewable energy capacity will be added in 2021, according to the IEA, which says the growth of renewable-generating capacity will accelerate over the next five years, accounting for almost 95% of the total increase in global power capacity between now and 2026.

By 2026, global renewable-electricity output will grow by 60% to more than 4,800 Gigawatts - equivalent to the current combined capacity of fossil fuels and nuclear. China is expected to account for 43% of the growth, followed by Europe, the US and India, with the four countries accounting for 80% of renewable capacity expansion worldwide.

2. Solar will set new records and wind will grow faster

a chart showing how solar PV is currently the lead technology in the renewables race
Solar PV is currently the lead technology in the renewables race.
Image: IEA

The IEA expects solar to grow by 17% this year, accounting for 60% of new capacity in 2021, despite the impact of rising commodity prices on the cost of making solar panels. Although utility scale solar is still the cheapest way to increase capacity, IEA says initiatives in China, the EU and India will boost the development of commercial and domestic solar projects, too.

Ambitious targets for developing solar means India is forecast to grow its renewable power capacity faster than any other nation in the decade ahead. Federal tax credits and the low cost of wind and solar are expected to see a 65% increase in growth of renewable capacity in the US, the IEA says.

3. Asia is set to overtake Europe in global demand for biofuels

a chart showing Asian nations are expected to account for a third of global fuel production by 2026
Asian nations are expected to account for a third of global fuel production by 2026.
Image: IEA

The IEA expects demand for biofuels to overtake 2019 levels by the end of this year and double by 2026. Although the US is likely to lead this surge, much of the growth there will be due to the rebound from the collapse in demand caused by COVID-19 in 2020, it says.

Asian nations are expected to account for 30% of the global growth in production by 2026 thanks to strong encouragement for the use of biofuels. India will become the world’s third-biggest market for bioethanol by 2026 and biodiesel targets set by Indonesia and Malaysia are expected to drive growth in Asia.

4. Renewables in hard-to-decarbonize sectors promise a bright future

a chart showing that Hydrogen projects look set to stimulate production from renewables in Europe
Hydrogen projects look set to stimulate production from renewables in Europe.
Image: IEA

Policies to encourage production of hydrogen from renewables and the development of biojet fuels have stimulated a large number of new projects, according to the report. If all the hydrogen projects so far announced went ahead, wind and solar would need to expand by a third from today’s capacity.

“Biojet technology is ready to fly but policies to stimulate demand lag behind,” says the report. But if nations can agree then demand could rise to 6 billion litres by 2026, which would call for new sources of waste to turn into biofuel for planes.

5. With the right policies, renewables could boost the global recovery

a chart showing private-sector investment is key to the development of renewable energy projects
Private-sector investment is key to the development of renewable energy projects.
Image: IEA

Just 11% of global governments’ planned economic recovery budgets are devoted to boosting renewables, and without a partnership with the private sector the changes needed to achieve net zero will not be possible, says the IEA.

What's the World Economic Forum doing about the transition to clean energy?

Moving to clean energy is key to combating climate change, yet in the past five years, the energy transition has stagnated.

Energy consumption and production contribute to two-thirds of global emissions, and 81% of the global energy system is still based on fossil fuels, the same percentage as 30 years ago. Plus, improvements in the energy intensity of the global economy (the amount of energy used per unit of economic activity) are slowing. In 2018 energy intensity improved by 1.2%, the slowest rate since 2010.

Effective policies, private-sector action and public-private cooperation are needed to create a more inclusive, sustainable, affordable and secure global energy system.

Benchmarking progress is essential to a successful transition. The World Economic Forum’s Energy Transition Index, which ranks 115 economies on how well they balance energy security and access with environmental sustainability and affordability, shows that the biggest challenge facing energy transition is the lack of readiness among the world’s largest emitters, including US, China, India and Russia. The 10 countries that score the highest in terms of readiness account for only 2.6% of global annual emissions.

To future-proof the global energy system, the Forum’s Shaping the Future of Energy and Materials Platform is working on initiatives including, Systemic Efficiency, Innovation and Clean Energy and the Global Battery Alliance to encourage and enable innovative energy investments, technologies and solutions.

Additionally, the Mission Possible Platform (MPP) is working to assemble public and private partners to further the industry transition to set heavy industry and mobility sectors on the pathway towards net-zero emissions. MPP is an initiative created by the World Economic Forum and the Energy Transitions Commission.

Is your organisation interested in working with the World Economic Forum? Find out more here.

But, with the right policies and incentives, public spending could mobilize more than $400 billion of private investment in renewable energy projects. The report says this would boost the global economic recovery and create a new wave of renewable-power projects equivalent to the entire capacity of the Middle East by 2026.