Clean energy achieved momentum globally in 2022, yet it was something destructive that triggered that momentum.
Russia’s invasion of Ukraine catapulted the world into a global energy crisis. And that in turn sparked a drive to switch from fossil fuels to renewables.
As European governments and businesses work to quickly ramp up energy alternatives to replace Russian gas, the amount of renewable power capacity added in Europe in the 2022-27 period is forecast by the International Energy Agency (IEA) to be twice as high as in the previous five-year period. That’s being driven by a combination of the attempt to limit global warming to 1.5C and energy security worries.
However, multinational banking giant ING reported in its 2023 Energy Outlook that, despite uncertainties, most European utilities “fared very well [in 2022] and will continue to do so in the next [year].”
In the US, the federal government’s passage of the Inflation Reduction Act (IRA) in late 2022 will provide support and long-term visibility for the expansion of renewables. In 2022, private investment in renewables in the US reached $10 billion. Deloitte forecasts high levels of private investment to continue “as investors are attracted by transparent and predictable returns on mature technologies that are backed by the IRA’s 10-year tax credits.”
And in China, as a result of its recent 14th Five-Year Plan, the country is expected to account for almost half of new global renewable power capacity additions over the 2022-2027 period.
IEA executive director Fatih Birol said in December:
Renewables were already expanding quickly, but the global energy crisis has kicked them into an extraordinary new phase of even faster growth as countries seek to capitalize on their energy security benefits. The world is set to add as much renewable power in the next five years as it did in the previous 20 years.
IEA expects global renewable power capacity to grow by 2,400 gigawatts over the 2022-2027 period – that’s equal to the entire power capacity of China today.
That expected increase is 30% higher than the amount of growth that was forecast just a year ago, spotlighting how quickly governments have thrown additional policy weight behind renewables.
Renewables are set to account for over 90% of global electricity expansion over the next five years – and they’ll overtake coal to become the largest source of global electricity by early 2025.
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