- Rystad Energy believes 2022 to see record high of utility scale renewable energy capacity with 220 GW
- 88% capacity or 195 GW is already under construction and solar PV accounts for 46% of this
- During H1/2022, analysts expect potential downturn for solar and wind energy projects due to high commodity prices and rising steel prices, respectively
The year 2022 will see a record high of utility scale renewable energy installations with an addition of 220 GW globally, expected to grow by 38 GW on year on year, according to Rystad Energy that also warns of a slowdown in capacity additions due to various factors.
Solar PV and wind energy alone will account for 85% of the 220 GW forecast, with pumped hydro, battery, solar thermal and storage adding the remaining 15%. Battery capacity will bring in another 12 GW or 6% of the total new renewables capacity, taking the total to 24.6 GW by the end of 2022, improving 96% YoY.
The hydrogen pipeline will also jump 70% annually with more than 400 MW additions expected. Of the 220 GW, 88% capacity or 195 GW is already under construction and solar PV accounts for 46% of the latter.
Annual investments in solar and wind will increase to over $300 billion, registering an annual growth of 20% over $240 billion in 2021, driven mainly by ‘surging’ solar PV investments where the numbers are expected to rise by 18% to $138 billion from $117 billion in 2021.
The analysts fear that delays could come from commodity price hikes for solar projects and rising steel prices for onshore wind projects, which may lead to a ‘potential downturn’ at least for H1/2022. Rystad Energy’s Head of Renewables Research Gero Farruggio said, “Projects expected to start construction this year will face challenging economics, delays and even cancellation risks.”
“However, increased polysilicon manufacturing capacity – projected to surpass 1 million tons per year in 2022 – will provide some respite to prices following a 300% spike in 2021,” explain the analysts.
IHS Markit analysts too see the supply chain challenges to continue for clean energy in H1/2022, but ease with new polysilicon and wafer capacity coming online in H2/2022 (see IHS Markit’s Top 10 Clean Energy Trends).