Despite headwinds caused by the lasting impacts of the coronavirus pandemic, supply chain constraints, trade disputes, and an energy crisis, renewable energy is on pace to set another global record for generating capacity in 2022, according to the International Energy Agency (IEA).
Renewable energy capacity additions increased by 6% in 2021 to almost 295 GW. Deployment is expected to increase by over 8% in 2022, IEA said, surpassing 300 GW of installed renewable capacity for the first time.
Solar PV will likely account for 60% of global renewable capacity added this year as 190 GW is brought online, a 25% increase from last year.
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Global deployment of onshore wind is expected to bounce back to almost 80 GW, while onshore wind growth is expected to decline 40% in 2022. The decline in offshore wind capacity additions in 2022 is due to last year's surge in China to get ahead of a subsidy phase-out.
The largely positive trajectory for renewables is likely to stall next year, IEA said, without new government policies. The flatlining for renewables will likely be due to 40% lower hydropower additions due to a reduced project pipeline in China.
IEA's Renewable Energy Market Update surmised that the current energy crisis -- fueled by Russia's invasion of Ukraine -- is a crossroad for renewable energy. Either the moment will demonstrate the need for more rapid deployment of clean energy technologies, or fossil fuel companies will become more entrenched due to windfall profits.
While the current energy crunch requires near-term shale oil and gas that can be brought to market quickly, IEA executive director Fatih Birol writes that "lasting solutions… lie in reducing demand via the rapid deployment of renewables, energy efficiency and other low emissions technologies."
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Birol said oil and gas companies should invest profits earned from sky-high prices in renewable energy, saying that could provide "a major boost" to clean energy deployment.
IEA estimates that global net income from oil and gas production this year will be nearly $2 trillion higher than 2021.
"If the global oil and gas industry were to invest this additional income in low emissions fuels, such as hydrogen and biofuels, it would fund all of the investment needed in these fuels for the remainder of this decade in the Net Zero Emissions by 2050 Scenario," Birol said.
Birol called the current moment a "once in a lifetime opportunity" for oil and gas producing countries to invest in low-emissions resources.
