International Energy Agency report: Renewable energy growth hits record high in 2021, but supply chain problems loom

By the end of this year, 290 GW of new capacity is expected to be put into use, and 2021 will break the renewable energy power growth record just set last year. This year's new capacity even exceeds forecasts made by the International Energy Agency (IEA) in the spring.

The IEA said at the time that "exceptionally high growth" would be the "new normal" for renewable electricity. The IEA said in its October 2020 World Energy Outlook report that solar energy, in particular, is expected to become the "new king of electricity."

Solar energy continues to dominate in 2021, with record growth expected to reach nearly 160 gigawatts. It accounts for more than half of all new renewable energy capacity added this year, a trend the IEA believes will continue over the next five years. According to a new report, renewable energy will likely account for 95% of new power capacity globally by 2026. The IEA also predicts explosive growth in offshore wind power generation, which could more than triple over the same period.

The IEA says that by 2026, global renewable energy generation could be equivalent to today’s fossil fuel and nuclear generation combined. This is a huge transformation. In 2020, renewable energy accounted for only 29% of global electricity generation.

Still, there is some bad news in the IEA’s new forecast for renewable energy. Soaring commodity, shipping and energy prices all threaten renewable energy's previously rosy prospects. The cost of polysilicon, used to make solar panels, has more than quadrupled since the start of 2020, according to the IEA. Investment costs for utility-scale onshore wind and solar farms increased by 25% compared with 2019. This could delay the completion of new renewable energy projects already contracted.

More than half of new utility-scale solar projects already planned for 2022 may face delays due to rising prices for materials and transportation, according to a separate analysis by Rystad Energy. Delay or cancellation.

If commodity prices remain high over the next year, it could wipe out three to five years of gains made by solar and wind respectively when it comes to affordability. Over the past few decades, photovoltaic module prices haveThe sharp decline in has fueled the success of solar energy. The cost of solar energy dropped from $30 per watt in 1980 to $0.20 per watt in 2020. By last year, solar power was already the cheapest source of electricity in much of the world.

However, renewable energy is not falling far behind as the cost of all forms of energy is rising. IEA Executive Director Fatih Birol said in a press release on Wednesday: "The high commodity and energy prices we are seeing today are creating new challenges for the renewable energy industry, but rising fossil fuel prices are also making renewables more Competitive. ”

Still, the transition to renewable energy needs to be significantly accelerated to cope with the scale of the climate crisis. According to numerous studies, greenhouse gas emissions from burning fossil fuels need to all but disappear by mid-century to avoid catastrophic climate change. To achieve this, new renewable generation capacity will need to nearly triple the rate forecast by the IEA over the next five years, the agency said.