The renewables sector could reach a historic milestone next year by outstripping coal as the biggest producer of global electricity, says the International Energy Agency.
In its Electricity Market Report Update, released today, the IEA tentatively pushed forward its previous prediction that renewables would achieve that milestone in 2025.
Its latest analysis shows that moment could come as early as 2024 – “if weather conditions are favourable.”
The new prediction is put down to the “accelerated pace” of increases in renewable capacity. The IEA recently found that the world is on course to add a record-breaking amount of renewables to electricity systems this year. This has been partly driven by the response to the energy crisis triggered by Russia’s invasion of Ukraine.
Another factor is the “plateauing” of energy generation from coal. The IEA says that declines in fossil-fired electricity generation generally are now becoming “structural,” driven by large drops in Europe and the US.
Next year will also be the first in history in which renewables account for over one-third of global electricity generation, says the IEA.
Growth in renewable electricity generation is also expected to be a match for increasing global electricity demand over the next two years.
Global renewable generation increased by 7.8% in 2022, its highest growth rate over the last 30 years. Growth is expected to dip slightly this year as reoccurring droughts hit hydropower production, but the IEA says this should rebound to 11% in 2023.
Global electricity demand is meanwhile set to increase by just under 2% this year, slightly down from 2.3% in 2022. This is partly due to a “staggering” 6% year-on-year decline in electricity demand in the EU.
The drop in the EU has been driven by energy-intensive industries contending with skyrocketing energy prices following the invasion of Ukraine. That trend has continued this year, despite prices falling from previous highs.
Assuming an improving world economic outlook, the IEA says electricity demand is expected to rise by 3.3% next year and will continue to grow strongly in years to come.
Keisuke Sadamori, the IEA’s director for energy markets and security, says he is “encouraged” to see renewables production growing to meet this demand. He called on policymakers and the private sector to “build on this momentum to ensure emissions from the power sector go into sustained decline.”