Global Renewable Power Capacity to More Than Double by 2030 Despite Challenges, Says IEA

Renewable electricity generation worldwide is set to experience unprecedented expansion, with global capacity expected to more than double by 2030 according to the International Energy Agency’s (IEA) latest medium-term forecast. 

The IEA’s Renewables 2025 report projects an increase of approximately 4,600 GW of renewable power capacity over the next five years, a scale roughly equivalent to adding the entire power generation capacity of China, the European Union, and Japan combined.

Central to this growth is solar photovoltaic (PV) technology, which is expected to account for approximately 80 per cent of the expansion. 

The rapid rise of solar PV is attributed to its low costs and accelerated permitting processes, making it the dominant force in renewable capacity additions globally. Wind, hydropower, bioenergy, and geothermal energy will also contribute importantly, with each technology expected to see meaningful growth.

Regional Dynamics and Emerging Markets Growth

Emerging economies across Asia, the Middle East, and Africa are fueling much of the renewables surge, supported by increased cost competitiveness and stronger governmental policy frameworks. 

Many countries in these regions have introduced new auction programs and raised renewable energy targets. India, for instance, is poised to become the world’s second-largest renewables growth market after China, on track to meet ambitious 2030 targets comfortably, the report notes.

Geothermal energy installations are on course to reach historical highs in markets such as the United States, Japan, and Indonesia, as well as numerous developing nations. Additionally, growing grid integration challenges are renewing interest in pumped-storage hydropower, which is expected to grow almost 80 percent faster in the next five years compared to the prior period.

Sector Confidence Amid Challenges

Renewable energy companies remain optimistic, with most major developers maintaining or increasing their 2030 deployment goals compared to last year. 

However, offshore wind faces a weaker growth outlook - about 25 percent lower than forecasts from the previous year. The dip is due to policy shifts, supply chain constraints, and rising costs in key markets.

Fatih Birol, Executive Director of the IEA, emphasised the dominant role of solar PV in upcoming renewable capacity growth. He highlighted the expected surge of solar projects in developing economies such as Saudi Arabia, Pakistan, and several Southeast Asian countries. 

“The growth in global renewable capacity in the coming years will be dominated by solar PV - but with wind, hydropower, bioenergy and geothermal all contributing, too,” said Birol. 

“Solar PV is on course to account for some 80 percent of the increase in the world’s renewable capacity over the next five years. In addition to growth in established markets, solar is set to surge in economies such as Saudi Arabia, Pakistan and several Southeast Asian countries,” he added.

Birol underscored the importance for policymakers to focus on supply chain security and grid integration challenges as renewable penetration deepens in electricity systems worldwide.

Revising Growth Projections

The IEA’s latest forecast shows a slight downward revision in global renewable capacity growth compared to last year’s outlook. This adjustment is mainly attributed to regulatory and policy changes in the United States and China. 

In the US, the early phase-out of federal tax incentives and other new regulatory measures has dampened renewables growth expectations by nearly 50 percent. 

Similarly, China's transition from fixed feed-in tariffs to auction mechanisms has affected project economics, leading to a reduction in forecasted capacity growth in the Chinese market. Despite these challenges, the dominant trend of robust renewable capacity expansion remains firmly intact, signalling a powerful shift to cleaner energy sources globally by 2030.

Balanced by Other Factors

These adjustments are partly offset by buoyancy in other regions, particularly India, Europe, and most emerging and developing economies, where growth prospects have been revised upward due to ambitious new policies, expanded auction volumes, faster permitting and rising deployment of rooftop solar. 

Corporate purchase power agreements, utility contracts, and merchant plants are also a major driver, together accounting for 30 percent of global renewable capacity expansion to 2030 - doubling their share compared with last year’s forecast.

Solar PV is expected to dominate renewables’ growth between now and 2030, remaining the lowest-cost option for new generation in most countries, while wind power, despite its near-term challenges, is still set for considerable expansion as supply bottlenecks ease and projects move forward, notably in China, Europe and India. Hydropower and other renewable technologies will continue to play important roles in supporting electricity systems and enhancing flexibility.

Concentrated Supply Chains

Global supply chains for solar PV and rare earth elements used in wind turbines remain heavily concentrated in China, underscoring ongoing risks to supply chain security. While new investment to diversify supply chains is taking place in countries around the world, concentration in China for key production segments is set to remain above 90 percent through 2030.

Mounting Pressure on Existing Systems

At the same time, the rapid rise of variable renewables is placing increasing pressure on electricity systems. Curtailment and negative price events are already appearing in more markets, signalling the need for urgent investment in grids, storage and flexible generation. 

Several countries are beginning to respond with new capacity and storage auctions, but much more will be needed to ensure that variable renewables are integrated in a cost-efficient and secure way.

Renewables in Transport and Heating

The role of renewables in transport and heating is expected to rise in the coming years, but only slightly. 

In the transport sector, their share of energy use is forecast to increase from 4 percent today to 6 percent in 2030, driven mainly by renewable electricity for EVs in China and Europe. Biofuels will add to growth in Brazil, Indonesia, India and other key markets. 

Renewables’ share of energy used globally to provide heat for buildings and industry is set to increase from 14 percent to 18 percent over the forecast period, the report noted.