With record new installations of emissions-free power surpassing sources that burn fossil fuel, renewable energy reached an important turning point last year.

This was revealed by the International Energy Agency.

The Paris-based agency said in its Medium-Term Renewable Energy Market Report that new installations of renewable energy overtook conventional power for the first time in 2015. Equivalent to 55 percent of newly installed capacity last year, global green power rose by a record 153 gigawatts. The IEA said that for  the first  time, the total installed capacity exceeded coal.

“We are witnessing a transformation of global power markets led by renewables and, as is the case with other fields, the center of gravity for renewable growth is moving to emerging markets,” IEA Executive Director Fatih Birol said.

Even before governments agreed in Paris in December to reduce carbon dioxide emissions, the acceleration toward clean-power generation was already picking up pace, shows the report. According to the report, over the next five years, renewables will be the world’s fastest-growing source of electricity.

Revising its forecast to 42 percent by 2021, the amount of green energy on power grids was raised by the IEA by 13 percent. According to the report, across the globe in 2015, about 500,000 solar panels were installed each day.

According to the agency, falling costs will support renewables capacity. Over the five year forecast period ending in 2021, solar panels are projected to be a quarter cheaper. Onshore wind-turbine prices may drop 15 percent.

Identifying China, the U.S., India and Mexico as clean-energy hotspots over the next five years, the IEA said that much of the growth will be driven by these four countries. In the European Union, an early policy supporter and adopter of clean-energy technologies, there may be a decline in growth rates.

According to the IEA, China is expected to account for 40 percent of the growth going forward and is seen as the “undisputed global leader”. The government has been prompted to accelerate policies favorable to clean energy by public pressure stoked by rampant urban air pollution. Paolo Frankl, head of the IEA’s renewable energy division, said that last year, China’s installation “corresponds to two wind turbines every hour”.

The industry in the U.S. was supported by the government’s solar and onshore wind tax-credit extension in December. The IEA expects it to have the second-largest global growth rate with a 50 percent increase in capacity over the forecast period ending in 2021, with developers no longer rushing to close projects in time for the subsidy, even as the U.S. market initially slowed.

Led by solar power which is seen growing eightfold, renewables in India are projected to expand by 76 gigawatts by 2021. Up from 45 gigawatts presently, a target to install 175 gigawatts by 2022 has been set by Prime Minister Narendra Modi. With $3.1 billion of state aid, India has plans to bolster its solar manufacturing industry. The IEA said that deployment may get limited however due to weak grid infrastructure and distribution risks.

(Adapted from Bloomberg)

Categories: Economy & Finance, Strategy, Sustainability