Renewable energy is expected to make a record rise in 2022

May 17, 2022

This article is published in collaboration with Reuters

Concern about climate change and energy security continues to drive renewable energy growth. Image: Unsplash/Manny Becerra

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The International Energy Agency forecasts significant renewable energy growth this year as a result of rising concerns over climate change and energy security.
Events such as the pandemic and the war in Ukraine have driven up energy prices, leaving policymakers scrambling for cheaper, more reliable energy.
However, supply chain issues and the high costs of solar photovoltaic panels continue to hamper renewables market growth, the IEA says.

Rising concerns over energy security and climate change will galvanize record new capacity to generate renewable power in 2022, the International Energy Agency (IEA) forecast on 11 May.

The IEA forecasts that 320 gigawatts will come online this year, equivalent to top European economy Germany's total annual demand, up from a previous record of 295 gigawatts in 2021.

Last year's additions, which were driven by the growth of solar energy in China and Europe, exceeded the Paris-based agency's expectations it said in a new report on renewables.

Renewable energy growth

"Energy market developments in recent months – especially in Europe – have proven once again the essential role of renewables in improving energy security, in addition to their well-established effectiveness at reducing emissions," IEA Executive Director Fatih Birol said.

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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 Centre for Energy & Materials is working on initiatives including Clean Power and Electrification, Energy and Industry Transition Intelligence, Industrial Ecosystems Transformation, and Transition Enablers to encourage and enable innovative energy investments, technologies and solutions.

Additionally, the Mission Possible Partnership (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.

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The impact of the COVID-19 pandemic and Russia's invasion of Ukraine have driven inflation to multi-decade highs and led to soaring energy prices in some advanced economies, leaving policymakers scrambling to find cheaper and reliable energy.

But the growth of renewable power has been hampered by supply chain difficulties, the IEA added, saying that the cost of installing solar photovoltaic (PV) panels will remain high this year and next due to higher commodity and freight prices.

Before the coronavirus crisis, prices for solar power had been declining for a decade, the IEA said.

And in the absence of stronger policies, the growth of renewables is expected to plateau next year as progress in solar power is offset by a 40% decline in hydropower expansion and stagnant growth in wind power generation.

Renewables growth was led by China, the European Union and Latin America in 2021, the IEA said, but it had lagged in the United States.

"The U.S. outlook is clouded by uncertainty over new incentives for wind and solar and by trade actions against solar PV imports from China and Southeast Asia," it added.

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