The International Energy Agency has today significantly increased its five-year growth forecast for renewables on the back of strong policy support in key countries and sharp cost reductions.

“We are witnessing a transformation of global power markets led by renewables and, as is the case with other fields, the centre of gravity for renewable growth is moving to emerging markets,” said Dr Fatih Birol, the IEA’s executive director.

In the latest edition of the its Medium-Term Renewable Market Report, the IEA states that last year “marked a turning point for renewables. Led by wind and solar, renewables represented more than half the new power capacity around the world, reaching a record 153 GW, 15 per cent more than the previous year.”

Most of these gains were driven by record-level windpower additions of 66 GW and solar PV additions of 49 GW.  

Indeed, the IEA says that about half a million solar panels were installed every day around the world last year. In China, which accounted for about half the wind additions and 40 % of all renewable capacity increases, two wind turbines were installed every hour in 2015.

Over the next five years, the IEA predicts that costs are expected to drop by a quarter in solar PV and 15 per cent for onshore wind and it adds that “renewables will remain the fastest-growing source of electricity generation, with their share growing to 28 per cent in 2021 from 23 per cent in 2015”.

The IEA report concludes that there are many factors behind the further growth of renewables: “More competition, enhanced policy support in key markets [notably the US, China, India and Mexico], and technology improvements.

“While climate change mitigation is a powerful driver for renewables, it is not the only one. In many countries, cutting deadly air pollution and diversifying energy supplies to improve energy security play an equally strong role in growing low-carbon energy sources, especially in emerging Asia.”

But despite the gains made in renewables last year, the IEA warns that there are still grounds for caution. “Policy uncertainty persists in too many countries, slowing down the pace of investments. Rapid progress in variable renewables such as wind and solar PV is also exacerbating system integration issues in a number of markets, and the cost of financing remains a barrier in many developing countries.”

And it adds that progress in renewable growth in the heat and transport sectors remains slow and needs significantly stronger policy efforts.

The IEA also sees a “two-speed world” for renewables over the next five years. “While Asia takes the lead in renewable growth, this only covers a portion of the region’s fast-paced rise in electricity demand. China alone is responsible for 40 per cent of global renewable power growth, but that represents only half of the country’s electricity demand increase.

This is in sharp contrast with the European Union, Japan and the US where additional renewable generation will outpace electricity demand growth between 2015 and 2021.”