IEA warns of RE headwinds
Renewable energy will slow down its expansion over the next five years and faces growing risks to deployment due to policy uncertainty, claims the International Energy Agency (IEA) in its latest report.
According to the body's annual Medium-term Renewable Energy Market report, power generation from renewable sources including wind, solar and hydro grew strongly in 2013, reaching almost 22% of global production.
But while global renewable output is seen rising by 45% and making up nearly 26% of global electricity generation by 2020, the IEA says annual growth in new renewable power will slow after 2014.
The IEA also predicts a decline in investment, forecasting that through 2020, investment in new renewable power capacity is seen averaging $230bn annually, compared to the $250bn invested in 2013.
"Renewables are a necessary part of energy security. However, just when they are becoming a cost-competitive option in an increasing number of cases, policy and regulatory uncertainty is rising in some key markets," said IEA executive director Maria van der Hoeven.
"Renewables no longer need high incentive levels, but rather require a reflection on market design to achieve a more sustainable world energy mix," added van der Hoeven.
The report noted that policy and markets risks threaten to slow deployment momentum in many non- OECD markets including China, where constraints include an absence of grid integration measures, and the cost and availability of financing.
In the EU, uncertainties remain over the post-2020 renewable policy framework and development of a pan-European grid to facilitate the integration of variable renewables, said the IEA.