Global renewable capacity additions are set to soar by 107 gigawatts (GW)

[StraightEdge]

Global renewable capacity additions are set to soar by 107 gigawatts (GW), the largest absolute increase ever, to more than 440 GW in 2023. This is equivalent of more than the entire installed power capacity of Germany and Spain combined. This unprecedented growth is being driven by expanding policy support, growing energy security concerns and improving competitiveness against fossil fuel alternatives. These factors are outweighing rising interest rates, higher investment costs and persistent supply chain challenges.
Solar PV capacity, including both large utility-scale and small distributed systems, accounts for two-thirds of this year’s projected increase in global renewable capacity.
Global renewable capacity additions could reach 550 GW in 2024 in our accelerated case, almost 20% higher than in the main forecast. This is mainly due to a more rapid deployment of residential and commercial PV installations, assuming a faster implementation of recent policies and incentives. The upside for utility- scale onshore wind and solar PV projects mostly depends on the pace of permitting, construction and timely grid connection of projects under development.

China’s contribution to global renewable capacity additions is expected to increase in 2023 and 2024, consolidating its position as the undisputed leader in global deployment. In 2022, China accounted for almost half of all new renewable power capacity worldwide. By 2024, the country’s share is set to have expanded to a record 55% of global annual renewable capacity deployment. By 2024, China will deliver almost 70% of all new offshore wind projects globally, as well as over 60% of onshore wind and 50% of solar PV projects.

European countries introduced more policy and regulatory changes to ease permitting in the last 18 months than over the entire previous decade. While permitting has become a key policy focus in Europe to accelerate the deployment of large-scale wind and solar PV and early benefits are starting to be visible, the proposed policy changes are expected to have limited impact on the deployment of renewables in 2023 and 2024 compared with other drivers, such as installations of small-scale residential and commercial solar PV.

In the United States, capacity additions will rebound this year after a difficult 2022. The US markets for wind and solar PV contracted last year due to restrictive trade measures and supply chain constraints, but annual additions for both technologies are set to increase by around 40% in 2023, with solar PV setting a new record. The current forecast is underpinned by existing tax incentives, while the Inflation Reduction Act will show its full effect after 2024, providing unprecedented certainty for renewable energy projects until 2032.

India’s renewable capacity additions are expected to increase again in 2023 and 2024, owing to faster onshore wind, hydropower and distributed solar PV deployment. However, utility-scale solar PV projects, India’s largest renewable electricity growth segment, are expected to slow briefly this year due to supply chain challenges, lower auction volumes and trade policies. While large-scale PV manufacturing is emerging in India, import tariffs are causing short-term demand and supply mismatches.