Global renewables capacity will grow by over 1.4TW in the period to 2029, accounting for two-thirds of total net capacity additions in the global power sector and led by solar, according to a forecast from Fitch Solutions.
Fitch said it expects Asia Pacific to dominate growth and add 805GW during the period from 2019 to 2029, with China capturing 508GW of the region’s capacity additions. “Our strong outlook for the market is underpinned by the Chinese government’s push to reduce costs and drive the sector to be subsidy free, enabling power sector parity.”
The analysts forecast that total non-hydro renewables capacity will reach 2.7TW by 2029. “Growth will be driven by solar power with the sector set to add over 770GW of new capacity, substantially more than the 590GW of growth expected from the wind sector.”
Solar pulls ahead
In its latest global renewables forecast Fitch said it expected to see solar capacity to overtake wind by 2021, growing at an average annual rate of 9.8%, compared to the slower 7.2% growth for wind.
“Our buoyant outlook for solar capacity growth is supported by the more widespread scope for deployments, with a greater variety of installations ranging from small domestic PV systems to large-scale utilities. We also see significantly shorter lead times and cost declines spurring growth.”
North America and Western Europe (NAWE) capacity additions are forecast to reach 436GW between 2019 and 2029. Western Europe is expected to continue to be the global outperformer in terms of renewables utilisation, with many of the region’s markets being early frontrunners for technology adoption.
“We see growth also being led by the second- and third-largest growth markets, the US and India, with 152GW and 123GW of total additions respectively.”
Out of the top ten capacity addition markets for the coming decade, Fitch said four are in the Asia region, namely first-place China, India (third); Japan (fourth); and Taiwan (tenth).
Analysis released earlier this week by Fitch highlighted that India suffers from having the highest number of power projects cancelled or suspended, which translates into a weaker capacity growth forecast for the market.
Using its Key Projects Database, a catalogue of the largest construction projects around the world, Fitch recorded 363 power project cancellations amounting to 326GW of unrealised capacity.
India is by far the most prolific country globally for stopping power generation projects, cancelling over 100GW across 73 projects, with coal and hydropower being the most halted developments numbering 35 and 20 respectively. Projects in India face frequent cancellations owing to issues with land acquisition, approvals and licensing and the realisation of purchase agreements.
Fitch said the cancellations give the potential for a redirection of public funds as large-scale government sponsored projects are halted at a time when renewable power sources are becoming increasingly cost competitive.