The International Energy Agency has stated improved policy settings have accelerated the global uptake of renewable energy and forecast generation capacity in the sector will go up by more than 40% over the next 5 years according to ABC.
The Paris-based energy advisor to OECD nations forecast renewables would account for 28% of global power generation by 2021, which is up from 23% last 2015.
However, Australia is still behind the rest of the world according to the IEA’s latest Medium Term Energy market report, with renewables representing around 13% of the total electricity output last year. The 14% fall in Australia’s renewable energy generation in 2015 was largely driven by a considerable drop in hydropower resulting from drier conditions and lower reservoir levels.
The IEA report stated that the Australian renewable capacity is expected to grow by 9 gigawatts which is roughly 50% of current levels in over the medium term. While generation is forecast to go up by 70% to reach 54 terawatts-hours in 2021.
According to the IEA, solar PVs are anticipated to drive capacity growth with 5 gigawatts, mostly from residential and commercial projects, although some utility-scale projects in the pipeline are seen coming on-line over the medium term. Small renewable energy certificates that provides upfront payment to commercial and residential installers based on their predicted electricity generation over 15 years should continue to make residential and commercial projects economically attractive.
Although rooftop generation is expected to drive the growth in renewables in Australia, the IEA is far more cautious in its outlook for utility-scale operations, specifically, wind generation.
The Australian consumers have benefited from the steep decline in solar PV costs, with the average cost going down to $2,600/kWh between 2014 and 2015, which is still expensive ion India, Germany, China but roughly half the average cost of $5,200 kWh in the United States.
China has the largest renewable energy market worldwide is expected to expand its capacity by another 60% over the next 5 years. It supported by the higher feed-in tariffs and a more favorable government policy.
The IEA also noted the United States’ move into 2nd place was aided by an extension of federal tax incentives which lifted a major policy uncertainty and improved investor confidence.
Featured Image Credit: Tim Green