The International Energy Agency (IEA) predicts renewable energy will account for nearly 95 percent of the increase in power capacity in the world through 2026 with solar power providing more than half the boost.

New renewable power capacity is expected to reach 290 gigawatts (GW) by the end of 2021. In 2020 the record of renewable energy was set at 280 GW which compares to current fossil fuel and nuclear power capacity of 4,800 GW according to the report.

This growth comes as commodity prices continue to rise. In its executive summary, the IEA writes that “rising commodity, energy and shipping prices have increased the cost of producing and transporting solar PV modules, wind turbines and biofuels worldwide. Since the beginning of 2020, prices for PV-grade polysilicon more than quadrupled, steel has increased by 50 percent, aluminium by 80 percent, copper by 60 percent, and freight fees have risen six-fold. Compared with commodity prices in 2019.”

The IEA estimates that investment costs for utility-scale solar PV and onshore wind are 25 percent higher. In addition, restrictive trade measures have brought additional price increases to solar PV modules and wind turbines in key markets such as the United States, India and the European Union.

New renewable power capacity this year will rise to a second consecutive all-time high in 2021, the Paris-based energy wathdog said in its annual Renewables Market Report.

“This year’s record renewable electricity additions of 290 gigawatts are yet another sign that a new global energy economy is emerging,” said IEA Executive Director Fatih Birol.

“The high commodity and energy prices we are seeing today pose new challenges for the renewable industry, but elevated fossil fuel prices also make renewables even more competitive.”

Renewable electricity capacity by 2026 will equal the current total global power capacity of fossil fuels and nuclear energy combined, the IEA added.

More robust government policies and climate goals, advanced by pledges at the COP26 conference in Glasgow last month, are driving the increases but the pace of renewables growth needs to accelerate to limit temperature rises, the IEA said.

China leads the world in new capacity and is four years ahead of its own wind and solar infrastructure targets, while India will double new installations from 2015-2020.

"China continues to demonstrate its clean energy strengths, with the expansion of renewables suggesting the country could well achieve a peak in its CO2 emissions well before 2030," Birol said.

Still, the IEA warned that over the next five years, average annual additions of solar and wind capacity would need to nearly double from the agency's current predictions to achieve net zero emissions by 2050, while annual demand growth for biofuels would need to quadruple.
"To get renewables on track with net zero by 2050, governments not only need to address current policy and implementation challenges but also increase ambition for all renewable energy uses," the IEA wrote.