Spurred by deep cost reductions and favorable government policies, renewable energy sources have for the first time surpassed coal as the largest source of installed power capacity in the world, according to a 25 October report by the International Energy Agency (IEA). Countries installed a record 153 GW of renewable power in 2015, which accounted for more than half of the world’s total new capacity for electricity. The IEA now predicts 42% growth in renewable capacity through 2021—a 13% jump from the five-year forecast the agency issued a year ago.
The unprecedented jump last year in renewable capacity—which is not the same as generation, since the wind isn’t always blowing and the Sun isn’t always shining—came largely from onshore wind (63 GW) and solar photovoltaics (49 GW). About half a million solar panels were installed every day around the world. China installed two wind turbines every hour. The country accounted for about half the world’s wind additions and 40% of the overall renewable-capacity increase, the IEA reports.
Over the next five years, photovoltaic generation costs are expected to drop by 25%, and onshore wind costs will decline 15%, according to the IEA. And there are indications that costs for large offshore wind projects could fall by as much as 50% by 2021.
“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, the IEA’s executive director, in a statement.
Renewables, which also include geothermal, hydroelectric, and biomass, are expected to account for more than 60% of the growth in world electricity generation over the next five years. Annual renewable energy output by 2021 could exceed 7600 TWh—equivalent to the current total electricity generation of the US and the European Union combined. The IEA expects renewables to account for 28% of electricity generation in five years, up from 23% in 2015.
Despite the rapid growth of wind and solar, hydroelectric will remain by far the largest source of renewable generation in five years, though its share of the total will fall from 71% in 2015 to 59% in 2021. Wind will grow from 15% to 21% of total renewables over that period, and solar’s share will climb from 4% to 9%.
In the US, wind generation has tripled and solar generation has increased 30-fold since 2008, according to the White House Office of Science and Technology Policy. Over the same period, the cost of wind power in the US has fallen by 40%, and solar has dropped by up to 60%.
The US alone represents close to half the upward revision to the IEA’s capacity forecast. The 2015 extension of federal tax credits for solar and wind investments, along with renewable portfolio standards that have been adopted by 29 states and the District of Columbia, should further increase capacity. Meanwhile, China is expected to account for 40% of the world’s total renewable growth over the next five years. Driven by the need to curtail its air pollution, China’s latest five-year plan upped the targets for renewables. By 2021, the report says, China will be home to more than one-third of the world’s solar and wind capacity.