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The largest annual increase in green production capacity is being catalyzed by the global energy crisis.
The production of energy from renewable sources is on the rise. 2023 will be a record year for solar photovoltaic and wind energy. The largest annual increase in green production capacity is induced by the global energy crisis, as explained in the International Energy Agency’s report “Renewable Energy
Market Update” (full report here).
Projections call for a one-third increase in renewable energy production capacity (photovoltaic and wind) by 2023, which is related to higher fossil fuel prices and energy security concerns. It’s a trend that is destined to continue and that brings the world’s total renewable electricity generation capacity to 4,500 gigawatts, which is equal to the combined power generation of China and the United States.
It is estimated to grow by 107 GW, the largest absolute increase ever recorded, and will exceed 440 GW in 2023. This dynamic is affecting major economies: renewable energy sources are one of Europe’s key responses to the energy crisis, and the new political measures, which they help to implement as well, may lead to significant increase also in the United States and India. Meanwhile, China is consolidating its leadership position and will account for nearly 55% of new renewable energy capacity in 2023 and 2024.
The global energy crisis has shown that renewable energy is the key to making energy supplies not only cleaner, but also safer and more affordable.
“Solar energy and wind are driving the rapid development of the new global energy economy. This year, the world will add a record amount of renewable energy to the electricity grid, more than the combined energy potential of Germany and Spain. The global energy crisis has shown that renewable energy is critical for making the energy supply not only cleaner, but also safer and more affordable, and governments are making efforts to implement it more quickly. But to achieve higher growth rates, some key issues need to be addressed. Politics need to adapt to changing market conditions, and we need to upgrade and expand the electrical grids so that we can fully take advantage of the huge potential of solar and wind power.”
Two-thirds of this increase in production capacity is related to the construction of large-scale solar PV installations, which are also supported by the growth of small private systems that more and more families are installing to reduce their electric bills. The capacity of 1,000 GW will be reached by 2024, and following this trend, by the year 2030, there will be enough solar PV production capacity globally to comfortably meet the level of annual demand projected in the IEA’s “Net Zero by 2050” scenario.
Wind power is also growing: after two years of stagnation, it is expected to increase by almost 70% in 2023. The boom is mainly tied to the completion of projects that were delayed due to Covid-19 restrictions in China and to supply chain problems in Europe and the United States. It is difficult to make any long-term projections given that, unlike PV, wind turbine supply chains are not growing fast enough to meet rising demand in the medium term. The main reason is the price rise for raw materials.
Newly installed solar photovoltaic and wind generators saved €100 billion for electricity consumers in the EU over 2021-2023.
In conclusion, European renewable energy capacity growth has been revised upward by 40% compared to the Ukraine pre-war period, as many countries focused on solar and wind power to reduce their dependence on Russian natural gas. The growth is attributed to high electricity prices that have made private PV systems more attractive and affordable for households, as well as to increased political support in major European markets, especially in Germany, Italy, and the Netherlands.
It has been estimated that newly installed solar photovoltaic and wind generators saved €100 billion for electricity consumers in the EU over 2021– 2023, replacing more expensive fossil fuel-based production. Wholesale electricity prices in Europe would be 8% higher in 2022 without additional renewable capacity. In several European countries, including Spain, Germany, and Ireland, the combined share of wind and solar photovoltaic power will exceed 40% in the energy mix by 2024.
