Renewable energies are seeing record growth in 2021, but supply chain problems loom

2021 is well on its way to breaking a global record for renewable energy growth, according to the latest renewable energy market report from the International Energy Agency. And this despite skyrocketing raw material prices, which could make the transition to clean energy more difficult in the future.

With 290 GW of additional capacity due to be operational by the end of the year, 2021 will break the record for renewable energy growth that was set last year. This year’s additions even exceed a forecast by the International Energy Agency (IEA) from spring.

“Exceptionally high growth” is the “new normal” for renewable power sources, the IEA said at the time. Solar energy in particular is well on the way to winning the crown as the “new king of electricity,” said the IEA in its World Energy Outlook report from October 2020.

Solar also dominated 2021 with expected record growth of nearly 160 GW. It accounted for more than half of the total renewable capacity added this year, a trend that the IEA believes will continue for the next five years. According to the new report, renewables are likely to account for 95 percent of new electricity capacity worldwide by 2026. The IEA is also forecasting explosive growth for offshore wind capacity, which could more than triple in the same period.

By 2026, the IEA says, the amount of renewable electricity capacity worldwide is likely to match today’s fossil fuel and nuclear capacity combined. That’s a huge shift. In 2020, renewable energies accounted for only 29 percent of global electricity generation.

Still, there are some dark clouds in the IEA’s new forecast for renewable energy. Rising prices for raw materials, shipping and energy threaten the previously rosy outlook for renewable energies. The cost of polysilicon, which is used to manufacture solar modules, has more than quadrupled since the beginning of 2020, according to the IEA. The investment costs for utility-scale onshore wind and solar parks have increased by 25 percent compared to 2019. This could delay the completion of new already completed renewable energy projects.

According to a separate analysis by Rystad Energy, more than half of the new utility-scale solar projects planned for 2022 could face delays or cancellations due to higher material and shipping prices.

If commodity prices stay high over the next year, three to five year profits could be wiped out Sun and wind have each made a huge difference when it comes to affordability. A dramatic drop in the price of photovoltaic modules over the past few decades has fueled the success of solar. The cost of solar energy fell from $ 30 per watt in 1980 to $ 0.20 per watt in 2020. Last year, solar energy was already the cheapest source of electricity in most of the world.

However, renewables have not fallen too far behind, as the costs of all forms of energy are increasing. “The high raw material and energy prices we see today are creating new challenges for the renewable energy industry, but the increased prices for fossil fuels also make renewable energies even more competitive,” said Fatih Birol, Executive Director of the IEA, in a press release today .

Nevertheless, the transition to renewable energies must be accelerated significantly in order to cope with the scale of the climate crisis. According to extensive research, greenhouse gas emissions from burning fossil fuels must practically disappear by the middle of the century in order to avoid catastrophic climate change. To do that, new renewable power capacity will have to grow almost twice as fast over the next five years as the IEA expects over the next five years, the agency says.

About Christine Geisler

Check Also

GM is open to further agreements with suppliers to ensure production of electric vehicles

With inflation and rising commodity prices, General Motors is planning strategic partnerships with suppliers to …