Renewable Energy will Break More Records in 2022 Despite Supply Chain Hiccups
The global shift to renewable energy sources has been very promising over the last few years, with record numbers seeming to come year after year. In 2021, we saw one of the largest leaps in overall capacity, and it looks like 2022 is set to top that number according to the International Energy Agency (IEA). While this might seem right on trend, it wasn't without the adversity of supply chain shortages around the globe.
What's to Come in 2022
According to their most recent Renewable Energy Market Update, IEA pointed out that 2021 wasn't a walk in the park either. In fact, the record-breaking 295 gigawatts of renewable power capacity that were added were faced with not only supply chain challenges, but construction delays and high material prices. These factors were mainly a bi-product of the COVID-19 pandemic.
As the renewable energy industry progresses beyond the pandemic, some of these supply chain shortages are still lingering. Nonetheless, global capacity additions are expected to rise roughly 25 GW this year to 320 GW. While this number doesn't seem huge, it's enough to satisfy the entire electricity demand of Germany. Or in other words, this number will officially match the EU's total electricity generation from natural gas.
Solar energy continues to lead the charge as it is on track to account for 60% of the global renewable power growth in 2022. Right behind that comes wind and hydro energy sources, accounting for nearly the remaining 40%.
There have been exceptionally great numbers coming out of the European Union, with annual additions jumping by almost 30% in 2021. And, thanks to a new proposal called the "European Solar Rooftops Initiative" being launched by Brussels, Europe's renewable capacity is set to grow exponentially in 2022 and 2023. This initiative is being put in place to cut Russian fossil fuels being used to power both commercial and residential buildings.
As for the United States, we face slight uncertainties due to "new incentives for wind and solar and by trade actions against solar PC imports from China and Southeast Asia" (see more here).
IEA executive director Fatih Birol, when asked about the outlook of renewables over the next year, said:
Cutting red tape, accelerating permitting, and providing the right incentives for faster deployment of renewables are some of the most important actions governments can take to address today’s energy security and market challenges, while keeping alive the possibility of reaching our international climate goals.
Looking Forward to 2023
As we brace for the future, we need to be aware of any downfalls. 2023 could see a plateau in renewable power capacity, mainly due to a 40% decline in hydropower expansion and minimal change in wind power additions. Momentum can be continued globally so long as the proper policies and incentives are put in place.
On the positive side, it looks as if the supply chain issues caused by COVID-19 and the Russian invasion of Ukraine could be less of a factor moving forward. This is due mainly to the fact that prices for fossil fuels have actually risen at a much faster rate.