Global renewable energy expansion to slow to 2020: IEA
LONDON, August 28, 2014
Last year power capacity from sources such as wind, solar or hydro expanded at its fastest pace to date, putting renewables on a par with natural gas at almost 22 per cent of global electricity generation.
However, annual growth in renewables capacity will slow and stabilise from next year to 2020 due to uncertain government policies and market risks, the IEA said.
For example, in many developing countries including China, measures are needed to integrate the grid and there are difficulties with the costs and availability of financing for renewables projects.
In the European Union, uncertainties remain over what the 28-nation bloc's post-2020 renewable policy framework will look like and a pan-European grid is needed to integrate variable renewable supplies.
The IEA estimated that global investment in renewables capacity could average more than $230 billion a year to 2020, lower than the $250 billion invested in 2013.
"Renewables are a necessary part of energy security. However, just when they are becoming a cost-competitive option in an increasing number of cases, policy and regulatory uncertainty is rising in some key markets," said IEA Executive Director Maria van der Hoeven.
"This stems from concerns about the costs of deploying renewables."
Most renewable energy sources no longer need high levels of incentives or subsidies but they do need stable policy frameworks which ensure a predictable return for investors, she added.
Several governments, particularly in Europe, have been reducing or halting subsidies for renewables over the past couple of years to reduce the burden on government coffers.
Earlier this month, a group of investors asked the European Commission to open proceedings against Italy over plans to cut solar power subsidies, claiming it changes the rules on which they based their investment decisions and could scare off foreign capital in the long-term. -- Reuters