The head of the International Energy Agency (IEA) says he is more optimistic the world will reach its climate goals after it was revealed renewable electricity expanded at its fastest pace in two decades.

The IEA’s Renewable Energy Market Update on Tuesday revealed the amount of renewable electricity capacity added in 2020 rose by 45%, to 280 gigawatts, which it claims is the largest year-on-year increase since 1999.

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“Wind and solar power are giving us more reasons to be optimistic about our climate goals as they break record after record. Last year, the increase in renewable capacity accounted for 90% of the entire global power sector’s expansion,” IEA executive director Fatih Birol said.

“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. A massive expansion of clean electricity is essential to giving the world a chance of achieving its net zero goals.’’

Policy deadlines drive growth

According to the IEA’s latest market update, global wind capacity additions almost doubled last year, to 114GW, while there was a 23% expansion of new solar PV installations to almost 135GW.

The IEA attributed the strong growth to policy deadlines in China, the US and Vietnam, noting China alone was responsible for over 80% of the increase in annual installations last year.

China’s boom came as projects contracted under the nation's former feed-in-tariff scheme, as well as those awarded in previous central or provincial competitive auctions, had to be connected to the grid by the end of 2020.

The IEA also highlighted that wind power developers in the US had rushed to complete their projects before the government's production tax credit incentive expired, however it was extended for another year in December.

The need to meet end-of-year deadlines saw a rush in the final three months of 2020, with developers connecting nearly 150GW of new renewable capacity, double the capacity commissioned in the fourth quarter of 2019.

Last year also set a new record for competitive auction volumes, with governments around the world awarding almost 75GW of onshore and offshore wind, solar PV and bioenergy through auctions last year — about 20% more than in 2019.

Solar to become 'the new king'

The IEA warned that growth in renewables was anticipated to slow this year and next, but it still anticipates increases to be 50% larger than the average expansion during the 2017-2019 period.

Annual wind capacity additions are expected to drop this year to about 80 GW, however the IEA points out this is still nearly 35% more than in 2019.

It expects solar to establish itself as “the new king” of global electricity markets, with solar PV installations to break new records as the IEA forecasts annual additions to reach 145GW this year and 162GW in 2022.

The IEA expects China to remain the centre of global renewable energy demand and supply, however growth there is expected to stabilise at levels below the record set in 2020, but still 50% above the 2017-2019 period.

It also believes any slowdown in China will be offset by strong growth in Europe, the US, India and Latin America, with government support and falling prices for solar and wind to continue to drive installations in those regions.

The IEA also noted its forecasts do not take into account the Biden administration’s new emissions reduction targets in the US, or its planned infrastructure bill, which, if enacted, would help further accelerate the deployment of renewables after 2022.