Global RE Capacity to Surge, India Emerges as Key Player- IEA Report
Global renewable energy (RE) capacity is set to triple by 2030, with solar power leading the charge. India’s rapid growth positions it as a major contributor, while challenges like grid integration and supply chain issues highlight the need for further investment and policy support.
October 10, 2024. By EI News Network
This was disclosed in the latest 'Renewables 2024' report, released by the International Energy Agency (IEA). As per the report, the world is on track to add over 5,500 GW of new renewable energy capacity between 2024 and 2030, nearly tripling the growth seen in the previous six years. This growth will be roughly equivalent to the total power capacity of China, the European Union, India, and the United States combined.
As per the IEA report, solar photovoltaic (PV) technology will account for 80 percent of this growth, as countries continue to invest in large-scale solar farms and rooftop installations. Wind energy is also set for a resurgence, with its capacity growth rate expected to double compared to the previous six years.
China will play a dominant role, contributing almost 60 percent of the global renewable capacity expansion by 2030. The country is set to house nearly half of the world's renewable power capacity by the end of the decade. However, India's renewable energy market is growing at the fastest pace among major economies, driven by ambitious government programs and policy reforms.
“Renewables are moving faster than national governments can set targets for,” said IEA Executive Director Fatih Birol. “By 2030, renewables will meet half of global electricity demand, largely due to the affordability and scalability of solar PV and wind power," he noted.
The report notes that 70 countries, representing 80 percent of global renewable capacity, are on track to surpass their renewable energy targets by 2030. However, this falls just short of the COP28 goal to triple the world’s renewable capacity by the end of the decade, with the world projected to reach 2.7 times its 2022 capacity by 2030. The IEA encourages further government action to accelerate progress, particularly in regions where high financing costs hinder renewable investment.
Focussing on India's RE scenario, the report said that India's renewable energy capacity is expected to more than triple by 2030, positioning the country as one of the largest contributors to the global clean energy transition. The IEA report projects that India’s annual renewable energy additions will grow from 15 GW in 2023 to a remarkable 62 GW by 2030. This will make India the third-largest renewable energy market globally, behind China and the United States.
Dwelling on Indian government's initiatives, the report pointed out that several key government initiatives are fueling this rapid expansion, including the Production Linked Incentive (PLI) scheme and the Approved List of Module Manufacturers (ALMM). These measures, combined with increased import duties on solar modules, are designed to boost domestic production and reduce dependency on imports. India’s solar module assembly capacity is projected to exceed 50 GW by 2024, doubling its 2022 levels.
The country is also exploring innovative hybrid energy systems, combining solar, wind, and energy storage technologies. In 2024, hybrid systems accounted for 40 percent of the total capacity awarded in competitive auctions. India is also making strides in offshore wind energy, with its first auctions expected soon, although these projects may not become operational until after 2030.
Looking at the the broader Asia-Pacific region, the report noted that the region is also poised for significant growth, though with varying results. While India leads the charge, other countries in the region face challenges. Chinese solar module manufacturers are adjusting to new trade regulations with the United States, resulting in a projected 20 percent decline in module assembly capacity by 2024. However, Vietnam is emerging as a key player, with 10 GW of wafer manufacturing under development.
The IEA forecasts that the Asia-Pacific region will add more than 680 GW of new renewable capacity by 2030, with solar PV projects driving 70 percent of these additions. The Association of Southeast Asian Nations (ASEAN) region is also expected to see substantial contributions, particularly in solar energy.
Hydropower remains a vital component of the global renewable energy mix. Between 2024 and 2030, over 165 GW of new hydropower capacity will come online, with China leading this expansion through large-scale pumped storage systems. India's hydropower capacity will also see significant growth, contributing to the country’s renewable energy goals.
Globally, solar manufacturing is undergoing a major transformation, with capacity expected to surpass 1,100 GW by the end of 2024. While this oversupply has led to a significant drop in module prices – more than halving since early 2023 – it has also caused financial losses for manufacturers. In response, the U.S. and India are both ramping up domestic solar manufacturing, though production costs remain significantly higher in these countries compared to China.
Despite the rapid growth, the report highlights several challenges that could impede further progress. Curtailment, where renewable electricity is generated but not used, has become a growing issue in several countries, with rates reaching as high as 10 percent. Governments must prioritise power system flexibility, streamline permitting processes, and invest in grid infrastructure to handle the increased share of variable renewable energy sources like wind and solar PV.
The IEA calls for 25 million kilometers of new electricity grids and 1,500 GW of storage capacity to be built by 2030. Additionally, the report stresses the need for policy support to boost the adoption of renewable fuels such as biofuels, biogases, hydrogen, and e-fuels, which remain more expensive than fossil fuel alternatives.
However, the IEA’s report presents an optimistic picture of the future of global energy, with renewables, particularly solar PV, on track to meet half of global electricity demand by 2030. While China will lead the world in total capacity, India’s rapid growth sets it apart as a key driver of the global renewable energy transition.
The report also underscores the importance of addressing supply chain challenges, financing barriers, and grid integration to fully realise the potential of renewables in meeting climate and energy security goals.
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