The world is increasingly waking up to the economic case for mature clean energy technologies, especially solar PV on which more than $1 billion/day is being invested, says the International Energy Agency (IEA) in its World Energy Outlook 2023 (WEO 2023).
Led by solar PV, renewable energy will make up nearly 50% of the global electricity mix by 2030, up from 30% now under the current policies. Renewables will add 80% of new power capacity by the end of this decade with solar PV alone accounting for more than half of the same.
By the same year, the share of fossil fuels is forecast to decline to 73%, down from 80%, with global energy-related CO2 emissions peaking by 2025.
All this is to happen under the current Stated Policies Scenario (STEPS), which the IEA points out is the 1st time this has happened in a WEO scenario based on today's policy settings.
"The transition to clean energy is happening worldwide and it's unstoppable. It's not a question of 'if', it's just a matter of 'how soon' – and the sooner the better for all of us," said IEA Executive Director Fatih Birol. "Governments, companies and investors need to get behind clean energy transitions rather than hindering them."
Under the Net Zero Emissions Scenario (NZE) envisioned in the report, if the world was to add 800 GW PV capacity/year by 2030, the world's largest solar market China alone can bring down its coal-fired generation by a further 20% by 2030.
"The consequences would spread well beyond China: in this case, more than 70 GW of additional solar PV is deployed on average each year to 2030 across Latin America, Africa, Southeast Asia and the Middle East," reads the report. "Even with modest curtailment, this reduces fossil fuel-fired generation in these regions by about one-quarter in 2030 compared with the STEPS. Solar PV alone cannot get the world on track to meet its climate goals, but – more than any other clean technology – it can light up the way."
Under STEPS, the world is following a trajectory to increase its annual solar PV deployment capacity from 220 GW in 2022 to around 500 GW by 2030. This shows that the utilization rate of solar manufacturing is below 40% through to 2030.
There is still significant potential for the growth of solar PV as by the end of this decade, the world could have manufacturing capacity to roll out 1,200 GW of solar panels/year, but under STEPS only 500 GW is deployed.
To ensure this production capacity is utilized, it would need several measures including strengthening the grids and adding storage.
Diversifying the supply chain is also crucial for solar deployment globally rather than being concentrated in a few regions.
Nonetheless, IEA believes the demand for fossil fuels is likely to remain 'far too high' to keep the global temperatures from exceeding 1.5 °C. STEPS will lead the world to a peak in energy-related carbon emissions in the mid-2020s, but emissions will not help achieve targets under the Paris agreement, instead the global average temperatures will go to up around 2.4 °C in 2100.
At the same time, the fighting in Ukraine continues and now the Middle East is at the risk of protracted conflict. Throw in the high interest rates and inflation, the macro-economic mood is 'downbeat'.
The world is already experiencing extreme weather events that are a result of the global average surface temperature having already neared 1.2 °C above pre-industrial levels. As nations battle these challenges, their focus on improving access to electricity and clean cooking has slowed or even reversed.
To bring the world 'on track' by 2030, the report writers propose 5 key pillars as action areas, namely:
"Every country needs to find its own pathway, but international cooperation is crucial for accelerating clean energy transitions," added Birol. "In particular, the speed at which emissions decline will hinge in large part on our ability to finance sustainable solutions to meet rising energy demand from the world's fast-growing economies."
The complete report is available on the IEA's website.