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Renewable power generating capacity growing fast

Over the next six years renewables are expected to account for 80% of the total new power generation

Last year renewable power generating capacity grew at its fastest pace ever, reaching 22% of the global total and matching natural gas' share of the energy mix, according to the International Energy Agency (IEA). 

Renewable energy's rise has been fuelled by falling costs and environmental mandates to cut carbon emissions. Renewables are expected to account for nearly 80% of total new power generation over the next six years, the IEA says in its new Renewable Energy Medium-Term Market Report, which forecasts trends in renewable energy demand and production from 2013 to 2020.

Electricity generation from renewable sources increased by 5% year-on-year in 2013, to nearly 5070 terawatt hours (TWh). By 2020, a ramp up in solar and onshore wind installations is expected to increase capacity by a further 45%, to make up nearly 26% of global electricity generation.

However, annual growth in new renewable power is seen slowing and then stabilising after 2014, putting renewables at risk of falling short of the absolute generation levels needed to meet global carbon emission reduction targets. The IEA has warned that policy uncertainty in the West and financing difficulties and complications connecting new capacity to the grid in non-OECD countries threaten to slow renewables' momentum.

Still, overall growth will be strong. Global renewable power capacity is expected to reach 2,555 gigawatts (GW) in 2020, up from 1,690GW last year. China and other non-OECD countries will lead the growth, accounting for around 70% of new renewable power generation between now and 2020. Fast-growing energy demand, increasingly cost-competitive forms of renewable energy and a need to diversify sources of supply will all drive growth. 

The IEA expects renewables to account for almost 45% of China's incremental power generation by 2020 as the country seeks to improve local air quality and slow the growth of its carbon emissions. China's 12th Five Year Plan calls for for 30% of the country's electricity to come from renewables by 2015.

Last year, non-OECD countries added 136 TWh of new renewable electricity generation capacity. Of that, China accounted for around 80% of the growth. Hydropower accounted for almost 40% of the increase, bolstered by China's 31GW of new capacity. Non-OECD solar power capacity also grew at its fastest ever rate due to China's 12.9GW of new capacity. 

Across non-OECD countries, hydropower will provide the bulk of growth in the coming years, with between 25GW and 35GW of additional capacity expected annually. Onshore wind capacity will be the second fastest growing non-OECD renewable sector with around 26GW of new capacity expected each year. Outside China, Brazil and India will be two of the largest contributors to non-OECD renewables growth. In OECD countries, renewables growth is slowing after several years of rapid expansion. 

In January the European Commission (EC) outlined plans for a European Union (EU) wide target for renewable energy to comprise at least 27% of the group's energy mix by 2030. The target is part of a wider plan to cut Europe's greenhouse gas emissions by 40%, from 1990 levels, by 2030

The EC said marking out this EU-level target for renewable energy is necessary to drive investment in the sector. However, the renewable energy targets are not legally binding and it will be up to individual member states to decide how to achieve them. Critics say the lack of legal enforcement will undermine the EU targets.

The IEA said this policy uncertainty and any sign governments are wavering in their commitments to renewables targets will curb much-needed investment in the sector. "Muddled signals from OECD markets also send the wrong messages at a time when newer markets have a golden opportunity to leapfrog to more flexible and cleaner power systems," IEA executive director, Maria van der Hoeven, says.    

Despite strong growth in renewables capacity last year, falling unit costs for solar PV and onshore wind have seen investment levels in the industry decline. In 2013 global investment in new renewable power capacity was estimated at around $250bn, down from a peak of $280bn in 2011. This year investment is expected to be just under $250bn as total renewable capacity additions remain around 125 GW. However, the IEA forecasts this will slow over the next few years, with annual investment in new renewable power capacity averaging around $230 billion until 2020. 

The IEA said the recent growth in renewables has been one of the most promising developments "in otherwise sluggish progress towards a more secure and sustainable energy future". 

Key data from the IEA 2013-2020 renewable energy report:

In 2013, global renewable electricity generation increased by 5% year-on-year (240 TWh) comprising almost 22% of total generation.

Global final energy use of modern renewable sources for heat, excluding traditional biomass increased by over 2% in 2013 to 14.5 exajoules (EJ), accounting for 8% of the global total.

Investment in renewable energy is expected to remain high by historical standards however it will grow at a slower pace than in recent years. 

In 2013 global investment in new renewable power capacity was estimated at around $250bn, slightly lower than 2012 levels and down from a 2011 peak of $280bn. Between 2014 and 2020 investment of around $230bn per year is expected. 

By 2020 global renewable electricity generation is expected to grow by almost 45%, to over 7,310 TWh. Hydropower represents about 37% of the total growth, followed by onshore wind (31%). 

The OECD region accounts for 30% of new renewable generation and renewable energy will account for around 80% of new OECD power generation. 

Non-OECD markets are expected to account for almost 70% of new renewable power generation. However renewable energy will meet only 35% of electricity needs in the non-OECD region.

Renewable capacity will rise from 1,690GW in 2013 to 2,555 GW in 2020.

China remains the largest driver of renewable capacity deployment, accounting for almost 40% of the global total and over 55% of non-OECD growth. 

Among other non-OECD regions, the Americas and the rest of Asia should make the largest growth contributions. 

In the OECD, after several years of rapidly increasing growth, renewables transition to a slower but stable annual capacity expansion.

Global biofuel production will reach 139bn litres in 2020, up from 115bn litres last year.

With a less optimistic outlook for the US and Brazil, world ethanol output is expected to reach 104bn litres by then.

The use of renewable energy for producing heat, including traditional biomass, is expected to grow by 1% per year to 49.7 EJ by 2020. 

In the buildings sector use of renewable energy for heat will grow at 5% per year, from 6.1 EJ in 2013 to 8.3 EJ in 2020, with China alone accounting for two-thirds (1.6 EJ) of this growth. 

Global final energy use of modern renewable sources for heat, excluding traditional biomass increased by over 2% in 2013 to 14.5 exajoules (EJ), accounting for 8% of the global total.

Investment in renewable energy is expected to remain high by historical standards however it will grow at a slower pace than in recent years. 

In 2013 global investment in new renewable power capacity was estimated at around $250bn, slightly lower than 2012 levels and down from a 2011 peak of $280bn. Between 2014 and 2020 investment of around $230bn per year is expected. 

By 2020 global renewable electricity generation is expected to grow by almost 45%, to over 7,310 TWh. Hydropower represents about 37% of the total growth, followed by onshore wind (31%). 

The OECD region accounts for 30% of new renewable generation and renewable energy will account for around 80% of new OECD power generation. 

Non-OECD markets are expected to account for almost 70% of new renewable power generation. However renewable energy will meet only 35% of electricity needs in the non-OECD region.

Renewable capacity will rise from 1,690GW in 2013 to 2,555 GW in 2020.

China remains the largest driver of renewable capacity deployment, accounting for almost 40% of the global total and over 55% of non-OECD growth. 

Among other non-OECD regions, the Americas and the rest of Asia should make the largest growth contributions. 

In the OECD, after several years of rapidly increasing growth, renewables transition to a slower but stable annual capacity expansion.

Global biofuel production will reach 139bn litres in 2020, up from 115bn litres last year.

With a less optimistic outlook for the US and Brazil, world ethanol output is expected to reach 104bn litres by then.

The use of renewable energy for producing heat, including traditional biomass, is expected to grow by 1% per year to 49.7 EJ by 2020. 

In the buildings sector use of renewable energy for heat will grow at 5% per year, from 6.1 EJ in 2013 to 8.3 EJ in 2020, with China alone accounting for two-thirds (1.6 EJ) of this growth. 

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