A boom in Chinese solar power construction drove another record-breaking year of renewables growth in 2023, according to the International Energy Agency (IEA).
Carbon Brief analysis of figures in the IEA’s Renewables 2023 report show that the world is now on track to build enough solar, wind and other renewables over the next five years to power the equivalent of the US and Canada.
Rapid growth has also pushed the IEA to once again significantly upgrade its renewables forecast, adding an extra 728 gigawatts (GW) of capacity to a five-year estimate it made just a year ago. This is more than the electricity capacity of Germany and India combined.
The agency attributes this growth to plummeting costs of solar power and favourable policy regimes, particularly in China. New solar and onshore wind now provide cheaper electricity than new fossil fuel power plants almost everywhere, it says, as well as being cheaper than most existing fossil fuel assets.
Despite such accelerated expansion, the world is not currently on track to achieve the COP28 target of tripling renewables capacity by 2030, according to the IEA.
However, it proposes various measures to further increase deployment, including more finance for developing countries.
‘Step change’
Last year was a “step change for renewable power growth” as the world built an extra 507GW of renewable capacity, primarily solar and wind power, according to the IEA.
This was a 49% increase on the previous year’s construction. It marked the 22nd year in a row that renewable capacity addition reached record levels.
Over the six-year period 2023-2028, an additional 3,684GW of renewables is expected to come online under the IEA’s “main” forecast. This is double the current total of renewable capacity installed globally.
In 2023, solar power both at utility-scale and on rooftops amounted to three-quarters of capacity additions, primarily due to growth in China. Over the next five years, 73% of the 3,174GW of new capacity will be solar, again driven largely by China. (See: China leads.)
By Carbon Brief’s calculations, this 2024-2028 period is on track to see an extra 4,963 terawatt-hours (TWh) of electricity generation from renewable sources.
This amounts to one-sixth of the world’s electricity output in 2022. As the chart below shows, this is equivalent to covering the entire electricity demand of the US and Canada with newly-built renewables.
By 2028, the IEA forecasts that renewables will account for 42% of global electricity generation, with wind and solar power making up 25%. Despite showing no growth across this period, hydropower is still expected to be the largest single source of renewable power.
Taken together, the agency says renewables will overtake coal power as the largest source of power in “early 2025”. (A year ago, the agency said renewables would become the world’s largest electricity source within three years.)
One major driver of this growth is the plummeting cost of renewables, especially solar photovoltaics (PV). Spot prices for solar modules declined by almost 50% in 2023 compared to the previous year, according to the IEA.
Last year, 96% of newly installed utility-scale solar and onshore wind capacity generated cheaper electricity than new coal and gas plants, according to the IEA.
Moreover, three-quarters of new wind and solar power plants provided cheaper power than even existing fossil-fuel facilities.
The other key driver is the strong policy support that renewables enjoy in “more than 130 countries”, the IEA says. It notes that “policies remain key for attracting investment and enabling deployment”, with roughly 87% of the utility-scale renewable growth between 2023 and 2028 “expected to be stimulated by policy schemes”.
At the same time, the report highlights the impact of the “new macroeconomic environment” on the renewables sector, with inflation and high interest rates raising costs. Offshore wind has been hardest hit, with the IEA’s forecast for its growth outside China dropping by 15%.
The report also examines renewable heat consumption and the use of biofuels. Both are set to grow considerably in the coming years, but the IEA says neither are currently on track for the trajectories seen in its net-zero scenario, which aligns with the Paris Agreement.
Record revision
As a result of this growth, the IEA has again significantly raised its forecast for renewables capacity expansion, by a record amount.
It now sees an additional 728GW being built in the 2023-2027 period compared to its forecast from 2022 – a 33% increase. This is notable considering that, last year, the agency described a five-year 424GW adjustment as its “largest ever upward revision”.
The chart below shows the 120GW divergence between actual renewables growth in 2023 – some 507GW – and the forecast for that year of 387GW, made by the IEA in 2022.
The IEA has a long history of making relatively conservative predictions for renewable growth that are subsequently outstripped by reality, due to a combination of more favourable policy conditions and faster-than-expected cost reductions.
Forecasts from previous IEA renewables reports issued in 2020 and 2021 showed annual renewable growth rates remaining fairly stable at around 200GW and 300GW per year for the following five years, respectively.
However, these forecasts have not been included in the chart above as, for the first time, the agency has converted all of its solar power values to direct current, resulting in slightly different GW values. This means previous forecasts are not directly comparable, although the 2022 forecast figures have been converted for this purpose.
China leads
A key conclusion from the IEA’s new report is the global dominance of China in deploying solar and other renewables, which is set to increase in the coming years.
In the period 2005-2010, China built 39% of the world’s new renewable energy capacity. This increased to 47% in the 2017-2022 period and the IEA expects it to rise to 59% between 2023 and 2028. This can be seen in the chart below.
By 2028, the agency estimates that nearly half of China’s electricity will be generated by renewables. According to Ember, as of 2022 only around 30% of China’s electricity was from renewables.
During this period, the nation is set to deploy four times more renewables than the EU and five times more than the US.
This growth is being driven by the nation’s success in solar power manufacture and installation, according to the IEA. In “almost all provinces”, generation costs for new utility-scale solar and onshore wind are now lower than for coal, which is generally used as the benchmark for electricity prices, the agency says.
The IEA attributes this progress to policy measures, including power market reforms, green certificate systems and province-level financial support to support rooftop solar installation. It also points to a “supply glut” that has helped solar module costs “plummet drastically”.
As China accounts for 90% of the upwards revision in the IEA’s forecast out to 2028, it notes that the nation’s solar achievements actually “hide slower progress in other countries”.
There have been a number of significant supportive policy changes in other countries and regions, however.
The US and the EU are expected to see renewable installation rates double across 2023-2028, compared to the previous six-year period – in both cases due primarily to solar expansion. The IEA attributes this to the US Inflation Reduction Act and supportive national policies – such as government renewable power auctions – across European nations.
The report also highlights the success of supportive policies in India and Brazil. It notes that while renewables are set to expand rapidly in sub-Saharan Africa – particularly South Africa – the region “still underperforms considering its resource potential and electrification needs”.
Tripling renewables
At COP28, nearly every government in the world agreed to a target of tripling global renewables capacity by 2030. This would bring the total to 11,000GW, which is in line with the IEA’s own net-zero scenario.
As it stands, the new report concludes that under the IEA’s “main case” forecast, shown in yellow in the chart below, renewable capacity would increase to 7,339GW in 2028.
Following that trajectory, capacity would reach around 9,000GW in 2030 – roughly an increase to 2.5 times current levels.
This forecast is based on existing policies and takes into account “country-specific challenges that hamper faster renewable energy expansion”, the IEA says.
By contrast, the IEA’s “accelerated case” involves governments “overcom[ing] these challenges and implement[ing] existing policies more quickly”.
In this scenario, shown in red below, renewables growth is around 21% higher. Capacity increases to 8,130GW in 2028, putting the world on track for the tripling by 2030 target.
The IEA lists a handful of broad measures that governments could take to achieve an “accelerated” trajectory.
These include: improved policy responses to the “new macroeconomic environment” such as higher inflation; more investment in grid infrastructure; and dealing with “cumbersome administrative barriers and permitting procedures and social acceptance issues”.
The IEA notes that “the lack of affordable financing remains the most important challenge to renewable project development in most EMDEs [emerging markets and developing economies], especially in countries where renewable policy uncertainties also increase project risk premiums”.
It emphasises the need to boost financing for EMDEs to overcome this barrier. Last year, renewable growth was concentrated in just 10 nations and tripling renewables requires “a much faster deployment rate…in numerous other nations”, the IEA says.
The post Analysis: World will add enough renewables in five years to power US and Canada appeared first on Carbon Brief.
Analysis: World will add enough renewables in five years to power US and Canada
Transitioning to sustainable practices could boost resilience to compounding geopolitical and climate threats, experts say.
The worldwide fallout from the U.S. war in Iran isn’t limited to gas prices.
Ocean and coastal creatures are being put at risk by the spills, noise, dredging and shipping associated with new offshore oil and gas infrastructure, says a new report by a group of environmental NGOs.
The report by a group of twelve environmental groups analysed planned new offshore oil and gas blocks covering 430,000 square kilometres – an area the size of Sweden – in 11 countries.
Blocks in countries such as Kenya, Indonesia and Australia overlap with some of the planet’s hotspots for marine biodiversity, home to mangroves, coral reefs, sea turtles, sharks and whales.
Oil and gas expansion is advancing in spite of the legal protections already in place, the report says, with a third of the area being licensed overlapping with marine and coastal protected areas.
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“It is alarming to see the research findings and the sheer scale of fossil fuel expansion trajectories threatening the health and future of our shared ocean,” said Tyson Miller, Executive Director of Earth Insight, one of the environmental NGOs involved in the report.
At the first conference on Transitioning Away from Fossil Fuels in Santa Marta, around 60 countries floated the idea of creating “fossil-fuel-free zones”, which would seek to place limits on coal, oil and gas in areas where development would lead to severe social and environmental harm.
As part of the landmark Kunming-Montreal biodiversity deal, governments have also pledged to protect 30% of the planet’s land and marine ecosystems by 2030. This could be used as an opportunity to limit oil and gas expansion in sensitive areas, Miller said.
The report says the findings “reinforce the need for governments, financial institutions and companies to stop funding and supporting offshore oil and gas expansion”, and calls for the creation of fossil-fuel-free zones in “high-value marine and coastal areas”.
Oil bidding in biodiversity hotspots
As one of the case studies, Kenya — which is set to host the Our Ocean Conference in Mombasa later this month — has opened 50 offshore oil and gas blocks for bidding in the Lamu Basin, one of East Africa’s marine biodiversity hotspots.
These blocks overlap with all the region’s mangroves and coral reefs, the report says, which provide nursery habitats for fish, sea turtles and the vulnerable dugong.
These ecosystems are already under severe stress from climate change-related ocean heating and increased water acidity and could now face seismic surveys, offshore drilling, dredging, increased shipping traffic, oil spills, chemical discharge and underwater noise pollution.
The government estimates that oil production will start by 2026, aligning with “global best practices”, and has said the Lamu basin has vast “untapped potential”. The country is expected to open bidding for the first 10 blocks by September.
Muturi wa Kamau, network coordinator for the Kenya Oil and Gas Working Group, said in a statement that the country “is preparing to open ecologically sensitive areas for fossil fuel exploration” while positioning itself as a leader in ocean diplomacy.
“The question is: at what cost are we willing to risk these fragile ecosystems and the livelihoods of coastal communities who have depended on them for generations?” Kamau said.
Australia’s Otway Basin
After a four-year pause, Australia — which will act as co-presidency of the COP31 climate summit — resumed offshore exploration in the Otway basin last year, with American energy firm ConocoPhillips among the operators approved for exploratory drilling off the country’s southern coast.
The sites under exploration are as close as one kilometre from a series of marine reserves known as sanctuaries for pygmy blue whales, who travel thousands of kilometres to reproduce in those waters. Orange roughy, a deep-sea fish that can live for over 140 years, may also be harmed.
In total, the report analysed new LNG export projects in Argentina, Alaska, Mexico and Tanzania, as well as expanded offshore oil and gas licensing in Australia, Cameroon, Indonesia, Jamaica, Kenya, Norway, and Trinidad and Tobago.
The post Planned offshore oil and gas expansion threatens key marine ecosystems, report appeared first on Climate Home News.
Planned offshore oil and gas expansion threatens key marine ecosystems, report
As competition for minerals needed to produce clean energy technologies intensifies, a growing number of countries have resorted to an age-old mechanism to cope with the threat of scarcity: stockpiling.
The world’s biggest economies are racing to shore up reserves of cobalt, lithium, graphite and rare earths, which are needed to produce batteries, electric vehicles, wind turbines and electric systems to wean the global economy off fossil fuels. The same minerals are also increasingly sought after to manufacture military hardware and chips for AI, adding further pressure on supplies.
But the cutthroat scramble to build up reserves threatens to drive up the costs of the energy transition by intensifying competition and pushing up prices of key materials needed to produce clean energy technologies, research published today has found.
“If you undermine the financial viability of [clean energy] projects through higher raw material costs, you’re going to delay their roll-out,” co-author Hugh Miller, the critical minerals lead at the Centre for Economic Transition Expertise at the London School of Economics and Political Science, told Climate Home News.
Stockpiling “is happening, whether we like it or not”, said Miller. “But if we’re going to do it, we need to have it in a coordinated manner that means we don’t have massive market volatility and adverse implications from every country trying to go at it alone,” he added.
The rise of stockpiles
A growing number of governments have adopted national stockpiling programmes in response to heightened geopolitical tensions around mineral supply chains.
Earlier this year, US President Donald Trump announced the establishment of a critical mineral reserve known as “Project Vault” to protect American businesses from shortages after China imposed export restrictions on rare earth supplies.
Beijing suspended the measures until November as part of a trade truce with Washington but the episode spooked Western governments and exposed how strategic materials can be weaponised to achieve geopolitical objectives.
Australia, China, the EU and India have also announced measures to create strategic mineral reserves. Japan and South Korea already have long-standing mineral stockpiling programmes.
“Legitimate concerns”
“There are legitimate concerns with regards to potential global shortages of these minerals,” said Miller, citing rapidly rising and concurrent mineral demand for the energy transition, AI, data centres, and military technologies, combined with underinvestment in new supplies for some minerals, such as copper.
While stockpiling can serve as an emergency response mechanism during acute shortages, it does nothing to address the underlying concentration risks in mineral supply chains. The Democratic Republic of Congo holds around 70% of the world’s cobalt reserves, for example, while China dominates the processing of 19 out of 20 minerals deemed critical by a large number of nations.
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Uncoordinated stockpiling programmes risk heightening the price volatility they are designed to hedge against, according to the report.
Researchers found that if Australia, China, the EU, India, Japan, South Korea and the US simultaneously built reserves of minerals to cover six months of imports, the aggregate stockpile demand could represent up to 34% of global annual cobalt supply and over 10% of global lithium, graphite and copper supply. That could cause a shock to the market, triggering the shortages and price spikes they are trying to avoid.
Miller said it was unlikely that every country would stockpile at that rate, but aggregate stockpiling demand of just 5% of global mineral supply would have an impact on prices.
Coordinating stockpiles: a role for the IEA?
Researchers found that avoiding the negative impacts of stockpiling requires global coordination over how mineral stocks are accumulated and released – a mechanism which already exists for other commodities, including oil.
Coordination should include agreed rules for countries to build up their stocks over a slow and staggered timeline and pre-agreed conditions for releasing reserves to provide market predictability and reduce the risk of price spikes.
The International Energy Agency (IEA), which was established after the 1970s oil crisis to coordinate emergency oil stock releases among member countries, is best placed to oversee such a mechanism, they say.
Earlier this year, IEA member countries called on the agency to strengthen its work on critical minerals, including by providing support to countries “that choose to establish and expand critical minerals stockpiling systems”.
But Miller and his co-author Pau Morandi, a policy fellow at the Centre for Economic Transition Expertise, argue that members should go one step further and mandate the IEA to coordinate the security of supplies, rather than only helping individual governments.
The IEA has been contacted for comment.
A call to action for the G7
Miller said he hoped the research could be picked up by the G7 group of wealthy countries, which could lead on mandating the IEA to take on this coordination role.
France, which is presiding over the group this year and is hosting leaders in Evian on the shores of Lake Geneva in mid-June, has made strengthening the resilience of critical minerals value chains a priority.
In a communique last month, finance ministers agreed to “deepen and expand our cooperation among G7 members and with like-minded partners” to strengthen and diversify critical mineral supply chains and to continue discussions “on how to best organise analytical cooperation”.
Sebastien Treyer, executive director of the Paris-based Institute for Sustainable Development and International Relations (IDDRI), said he hoped the G7 leaders’ summit can help move the discussion on critical minerals towards greater international cooperation to secure the resources the world needs to build a clean economy.
From inclusive and mutually beneficial partnerships to mine resources to stockpiling minerals, “we need to coordinate more like a trade organisation than something that is about securing supply,” he said.
The post The scramble to stockpile critical minerals could drive up energy transition costs appeared first on Climate Home News.
The scramble to stockpile critical minerals could drive up energy transition costs
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