Renewable energy sources grew at fastest rate in two decades last year

Renewable sources of electricity, including wind and solar, grew at their fastest rate in two decades in 2020 and are set to expand even more rapidly over the next two years, with high-capacity renewables likely to account for about 90 per cent of new global power capacity.

Renewable power capacity increased around 45 per cent in 2020, according to new analysis from the International Energy Agency, released Tuesday. That kind of growth will become the “new normal,” it says, surpassing forecasts the Paris-based agency released just a few months ago in November.

For the IEA, which advises industrialized countries on energy issues, shifting power generation to renewable sources is a key pillar of global efforts to reach carbon neutrality.

And while global carbon dioxide emissions are set to rise this year because of more coal use, IEA executive director Fatih Birol said the record-breaking adoption of wind and solar power is giving the world “more reasons to be optimistic” about hitting global climate goals.

“A massive expansion of clean electricity is essential to giving the world a chance of achieving its net-zero goals,” he said in a statement.

“Governments need to build on this promising momentum through policies that encourage greater investment in solar and wind, in the additional grid infrastructure they will require, and in other key renewable technologies such as hydropower, bioenergy and geothermal.”

Renewables comprised about 28 per cent of global electricity generation in the first quarter of 2020, according to IEA figures, up about two percentage points from the same quarter a year prior. In Canada, the federal government says renewable energy sources make up around 16 per cent of the country’s total primary energy supply.

The IEA report is particularly optimistic about renewables growth in Europe and the United States, which it expects to be “even brisker than previously forecast.”

It says they will compensate for a slowdown in China, which has accounted for around 40 per cent of global renewable capacity growth for the past several years.

Last year, renewable growth in the Asian country hit about 50 per cent for the first time, as power producers rushed to complete projects before the phase-out of government subsidies. The IEA says renewables growth in China will likely now stabilize at levels below its 2020 record, but will remain far higher than during the 2017-19 period.

The report notes that any slowdown in China in the coming years will likely be balanced out by Europe, the U.S., India and Latin America, where government support and falling prices for solar and wind “continue to drive installations.”

In Europe, the IEA forecasts that the growth of renewables will accelerate thanks to a booming market for corporate power purchase agreements, or PPAs.

Under a corporate renewable PPA, a company or institution agrees to purchase electricity directly from a green energy generator. Power generated on the site feeds back into the grid, offsetting the amount of electricity consumed by that company.

It’s a trend that has been growing at a rapid clip in the U.S., as more companies set ambitious emission-reduction goals and the cost of solar-power technology continues to drop. Canada is also seeing movement toward renewable PPAs, though it has been mainly confined to Alberta, where its unique deregulated power market allows a direct connection between buyer and seller.

Renewables in the U.S. could become even more optimistic in future forecasts, the IEA notes, owing to the impact of new emissions reduction targets and a massive infrastructure bill which, if passed, will boost renewables expansion even further.

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