Renewables Will Overtake Coal by Early 2025, Energy Agency Says

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Globally, renewable energy capacity growth will double by 2027, adding as much renewable energy over the next five years as in the past two decades, the International Energy Agency said on Tuesday.

By early 2025, renewables will overtake coal as the largest source of electricity generation, the found reporta pattern largely driven by the global energy crisis linked to the war in Ukraine.

“This is a clear example of how the current energy crisis can be a historic turning point towards a cleaner and more secure energy system,” said Fatih Birol, Executive Director of the IEA. a press release.

The expansion of renewable energy over the next five years will be much faster than what the agency predicted a year ago in its last annual report, said Heymi Bahar, a senior analyst at the IEA and one of the report’s lead authors. The report revised last year’s forecast of renewable energy growth up 30 percent following the introduction of new policies by some of the world’s largest emitters, such as the European Union, the United States and China.

While there has been a wartime resurgence in fossil fuel consumption, as European countries have made efforts to replace gas from Russia following February’s invasion of Ukraine, the effects are likely to be short-lived, the agency said.

Instead, the global energy crisis is expected to accelerate renewable energy growth over the next five years as countries embrace low-emission technology in response to rising prices of fossil fuels, including wind turbines, solar panels, nuclear power plants, hydrogen fuels, electric vehicles and electric heat pumps. Heating and cooling buildings with renewable energy is one of the sectors that needs greater improvements, the report said.

The United States this year passed the Inflation Reduction Act, a groundbreaking climate and tax bill that, in addition to many investments to reduce planet-warming greenhouse gas emissions, provided an “unforeseen” extension of long-term tax credits for solar and wind projects that extend to 2032, Mr Bahar said. Previously, these tax credits were revised every few years. Extending credits until 2032 provides greater certainty for investors, which is important in the energy industry, Mr Bahar said.

China alone is expected to install nearly half of new global renewable energy capacity in the next five years, based on the targets of the country’s new five-year plan. The country is still accelerating coal mining and production.

The recent momentum in renewable energy growth is not enough to help the world limit global warming to 1.5 degrees Celsius (2.7 degrees Fahrenheit) compared to pre-industrial levels, said Doug Vine, director energy analysis at the Center for Climate and Energy Solutions. The goal was set by the historic Paris climate agreement in 2015; above that threshold, scientists say the risk of climate catastrophe, including deadly heat waves and coastal flooding, increases significantly.

Scientists have calculated that meeting the 1.5 degrees Celsius target would require countries to curb or offset all carbon dioxide emissions by 2050. “We’re not there yet,” said Mr. the reach of government policies and actions.”

The main obstacles in rich countries are lengthy licensing procedures and lack of network infrastructure improvements and expansions, the report said. Some European countries have made progress in this area, including Germany, which has shortened permit timelines, and Spain, which has streamlined permits and increased grid capacity for renewable energy projects.

For low-income countries, the report says, the challenge is both weak grid infrastructure and lack of access to affordable financing for renewable projects, which require higher upfront costs for capital than for maintenance and operation. High interest rates on loans are often a barrier for many low-income countries, which are the most vulnerable but also least responsible for climate change.

At last month’s United Nations Climate Change Conference in Egypt’s Sharm El Sheikh, many world leaders called for an overhaul of two powerful financial institutions, the World Bank and the International Monetary Fund, which represent a global financial system that the leaders say is penalizing poorer countries. If implemented, supporters say, the reforms could offer troubled countries lower interest rates and allow financial institutions to raise trillions of dollars in private capital to help those countries transition to renewable energy.