May 11, 2022 - Energy & Environment

The storm clouds over a bright renewables landscape

Net global renewable capacity additions, by technology
Data: IEA; Chart: Simran Parwani/Axios

Renewable power growth is on pace to set fresh records this year, but the sector — notably U.S. solar developers — nonetheless faces headwinds.

Driving the news: The International Energy Agency, in a new report, sees the addition of roughly 320 gigawatts of generating capacity this year, led by solar and wind.

  • On a global basis, the 8% growth in 2022 is a significant boost over its previous forecast.
  • Higher commodity and freight prices have pushed solar and wind project costs above pre-COVID levels, yet "their competitiveness actually improves, due to much sharper increases in natural gas and coal prices."

Yes, but: IEA sees growth slowing slightly in 2023 even as clean energy needs to expand much faster to keep climate targets from slipping away.

  • "Unless new policies are implemented rapidly, growth remains stable in 2023 because solar PV expansion cannot fully compensate for lower hydropower and steady year-on-year wind additions," IEA said.

Zoom in: IEA's analysis and others this week warned of a big hit to U.S. solar due to the Commerce Department probe of whether Chinese manufacturers are doing an end-run around tariffs.

  • It's enough to fuel downward revisions in IEA's U.S. renewables growth estimate.
  • "The new investigation and the possibility of additional tariffs compounding procurement challenges in the short term, reducing the availability of solar PV modules," IEA said.

What we're watching: Commerce Secretary Gina Raimondo is certain to face questions about the tariff inquiry when she appears before the Senate Appropriations Committee Wednesday afternoon.

What they're saying: A new Rystad Energy analysis says a whopping 64% of 2022 U.S. solar additions are "in jeopardy," mostly because of the threat of new tariffs.

Renewables vs. Russian gas

Electricity from Russian gas vs. renewables growth in the EU
Data: IEA; Chart: Simran Parwani/Axios

"Wind and solar PV have the potential to reduce the European power sector dependence on Russian gas by 2023," IEA said.

By the numbers: IEA estimates that annually, 100-200 terawatt-hours of EU gas-fired power uses Russian supplies.

  • The agency's forecasts "indicate incremental growth of renewable electricity generation up to 180 TWh from 2021-2023."

But the IEA cautions that efficiency measures are also important for displacing Russian gas. And power is just part of the puzzle. Russia provides about 45% of European gas, with lots used for industry and home heating too.

Go deeper: EU Seeks to Boost Solar Energy to Cut Russian Gas, Draft Shows (Bloomberg)

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