Renewables 2019

Market analysis and forecast from 2019 to 2024
Renewables 2019

Power

Summary

Total renewable electricity capacity increased by 178 GW in 2018, similar to net capacity added in 2017. For the first time since the beginning of the 21st century, however, net renewable capacity additions did not increase y-o-y. But despite stalling, renewable capacity additions still accounted for 75% of all net power capacity growth.

After stalling in 2018, global annual capacity additions are forecast to resume growth in 2019. Accelerating growth in North America, Europe and the Asia-Pacific region is expected to offset the stable growth foreseen for China. Global additions hit a record 208 GW by 2020 before declining in 2021, a trend that results from events in two countries: in the United States, onshore wind additions peak in 2020 then decline as the production tax credit (PTC) is phased out, and in China several large-scale conventional and pumped hydro projects are expected to be commissioned in 2020.

In the main case forecast, renewable electrical capacity increases 50% (1 220 GW) by 2024, from 2 502 GW in 2018. Solar PV, including utility-scale and distributed applications, accounts for almost 60% of all renewable capacity expansion over the forecast period, followed by wind, hydropower and bioenergy. China remains the largest market, accounting for 40% of all renewable capacity growth over the forecast period, followed by European Union, the United States and India.

Renewable electricity capacity forecast summary, main case, 2018 and 2019

Openexpand

Overall, the forecast has been revised upwards by over 14% from Renewables 2018 owing to a more positive outlook for solar PV and on- and offshore wind. These revisions largely reflect the sustained cost reductions foreseen for these technologies and improvements in the general policy and regulatory environment, especially since the announcement of new competitive auctions. The main case forecast for hydropower and bioenergy remains consistent with last year, while the outlook for CSP and geothermal has been revised down slightly in light of slow project development in multiple markets.

Almost 40% of the upward revision results from a more optimistic outlook for the European Union, owing to an increase in planned auction capacities over the forecast period to meet the 2020 and 2030 targets. China’s growth is also higher than last year’s as a result of improved system integration for variable renewables and because solar PV and onshore wind become more competitive. The US renewable capacity forecast is more optimistic as well, reflecting improved PV and wind competitiveness. India’s outlook remains largely the same as last year’s, as challenges concerning DISCOM financial health and grid integration persist.

Renewables 2019 accelerated case expansion above main case, by technology

Openexpand

Renewables 2019 accelerated case expansion above main case, by region

Openexpand

In the accelerated case, renewable capacity expansion is 26% (1 540 GW) higher than in the main case, with annual additions accelerating to 280 GW by 2024 – 57% higher than 2018 and in line with the International Energy Agency (IEA) Sustainable Development Scenario. The accelerated case requires that governments address the three main challenges preventing faster deployment: 1) policy and regulatory uncertainty; 2) high investment risks in developing countries; and 3) system integration of wind and solar electricity in some countries.

Distributed PV has the largest potential for increased deployment in the accelerated case, especially for commercial applications (the drivers, challenges and economics of the distributed PV forecast are discussed in Chapter 2). In an increasing number of countries where electricity is not subsidised, solar PV generation costs are declining to become comparable with variable retail electricity prices, making net-metering and self-consumption opportunities more attractive.

Solar PV

Solar PV capacity increases 2.5-fold over the forecast period, reaching almost 1.2 TW in 2024 in the main case. Faster cost reductions and supportive policy frameworks worldwide underpin the more optimistic forecast for both utility-scale and distributed applications.

Overall, utility-scale plants are forecast to represent 55% of total solar PV expansion. In 2019, global solar PV additions are expected to rebound, mainly in the European Union and Vietnam, after remaining flat in 2018. China accounts for over 40% of global PV growth, followed by the European Union and the United States, which demonstrate similar capacity expansion in the next six years. With solar PV becoming more economically attractive, growth accelerates in Latina America, Eurasia, the Middle East and Africa.

Solar PV annual additions by segment, main and accelerated, 2013-2024

Openexpand
Wind

Onshore wind capacity is forecast to expand 57%, to 850 GW by 2024 in the main case forecast. Annual onshore wind additions reach almost 60 GW in 2020, resulting from a development rush in the United States before the PTC is phased out, and in China from the policy transition from FITs to competitive auctions. Global annual installations are expected to be lower (around 50 GW) from 2021 to 2024, as growth will be slower in China and the United States. Expansion accelerates in the European Union, however, as competitive auctions continue to keep costs relatively low. In Latin America, the MENA region, Eurasia and sub-Saharan Africa, the auction schedule ensures stable growth over the forecast period. Grid integration, financing and social acceptance are the key challenges to faster onshore wind expansion globally.

Offshore wind capacity is forecast to increase almost threefold (+43 GW) to 65 GW in 2024, producing almost 10% of total world wind generation. Although the European Union accounts for half of global offshore wind capacity expansion over 2019‑24, on a country basis China leads deployment, with 12.5 GW in development through numerous projects having continued policy support under the FIT scheme. Outside of China, record-low contract prices prompt expansion in the United Kingdom, Denmark, the Netherlands and Germany, with several auction rounds already finalised with zero‑subsidy contracts. The first large US capacity additions are also expected to come online during the forecast period, followed by those of Chinese Taipei.

Onshore and offshore wind annual additions, main and accelerated, 2013-2024

Openexpand
Hydropower

Hydropower remains the world’s primary source of renewable power in 2024. Capacity increases 9% (121 GW) over the forecast period, led by China, India and Brazil. One‑quarter of global growth is expected to come from just three megaprojects: two in China (the 16‑GW Wudongde and 10‑GW Baihetan projects) and one in Ethiopia (the 6.2‑GW Grand Renaissance project).

Apart from these three large projects, however, new capacity additions continue to decline over the forecast period. This is largely due to a slowdown in the two largest markets, China and Brazil, where growth is challenged by rising investment costs due to remaining economical sites being limited and to extra expenditures to address social and environmental impacts.

Nevertheless, annual additions are expected to expand in sub-Saharan Africa and in the Association of Southeast Asian Nations (ASEAN) region as untapped potential is exploited to meet rising power demand. Pumped storage hydropower (PSH) also expands, driven by the need for greater system flexibility to integrate increasing shares of renewables in China, Europe, North America and Australia.

Hydropower and pumped storage hydropower annual additions, main and accelerated, 2013-2024

Openexpand
Bioenergy

Bioenergy capacity increases 32%, to 171 GW by 2024. While this accounts for just 3% of total renewable capacity growth, bioenergy is nevertheless responsible for 8% of renewable generation at the end of the forecast period. Global additions remain stable at 6 GW to 8 GW, with China providing over 50% of new capacity, mainly in the form of solid biomass co generation and energy-from-waste (EfW) projects.

Brazil and India are the next-largest growth markets because of bagasse-fuelled co generation, linked to the sugar and ethanol industry. In the European Union, the record 3 GW of additions in 2018 (the highest since 2011) is not reached again. European capacity expands by just under 6 GW over the entire forecast period, led by the United Kingdom, the Netherlands and Turkey, owing to its emerging biogas market. 

Bioenergy installed capacity growth, main and accelerated case, 2019-2024

Openexpand
Geothermal

Geothermal capacity is anticipated to grow 28%, reaching 18 GW by 2024, with Asia responsible for one-third of global expansion, mainly through projects currently under construction in Indonesia and the Philippines, followed by Kenya, whose cumulative geothermal capacity is set to overtake Iceland’s during the forecast period. Pre-development-stage risks continue to be an important challenge, impeding the rapid development of untapped geothermal potential.

Geothermal installed capacity growth, main and accelerated case, 2019-2024

Openexpand
Concentrating Solar Power and marine

Global CSP capacity is forecast to increase 60% to 9 GW by 2024 in the main case, led by China and deployment in the MENA region, but marine technologies expand only slightly to reach 0.6 GW with pilot and small-scale projects.

CSP and marine installed capacity growth, main and accelerated case, 2019-2024

Openexpand

Next Heat