The International Energy Agency (IEA) raised its five-year growth forecast for the renewable industry because renewable energy surpassed coal last year as the largest source of installed power worldwide.
The IEA’s 2016 Medium-Term Renewable Market Report said renewables will grow 13 percent more between 2015 and 2021 than last year’s forecast, according to a press release. Costs for renewables are expected to fall by a quarter in solar photovoltaic (PV) systems and 15 percent for onshore wind energy throughout the 2015–2021 period.
Renewables are expected to generate more than 7,600 terawatt-hours by 2021, equivalent to the combined electricity generation of the United States and the European Union.
“We are witnessing a transformation of global power markets led by renewables and, as is the case with other fields, the center of gravity for renewable growth is moving to emerging markets,” said Fatih Birol, IEA executive director and a Turkish economist and energy expert.
The renewable market, led by solar and wind, made up more than half of the new power capacity around the world last year. Renewables reached a record of 153 gigawatts (GW), 15 percent more than the previous year, according to the press release.
Last year’s gains were seen in record-level wind additions of 66 GW and solar PV additions of 49 GW. Around half a million solar panels were installed daily around the world in 2015. Also, 40 percent of all renewable capacity increases were seen in China, where two wind turbines were installed every hour in 2015.
These high expectations are still modest compared to the huge untapped potential renewables offer.
The rapid progress in renewables can exacerbate any system-integration issues, and the costs still remain a barrier in developing countries, according to the press release. Also, renewable growth in heat and transport sectors is still slow.
The IEA expects renewables to cover more than 60 percent of the increase in world electricity generation in the medium term, which will quickly close the gap with coal. Asia is expected to take the lead in renewable growth for the electricity sector, but others are taking a longer time to join the renewable marketplace. China is responsible for 40 percent of global renewable-power growth, but that only represents half of the country’s electricity demand increase.