Renewable and coal-fired power generation surge in 2021 led by India and China
Energize Weekly, December 22, 2021
The global profile for electricity generation in 2021 is a tale of surging old and new power as both renewable energy and coal-fired generation are set to reach record highs, according to the International Energy Agency (IEA).
Leading this dual rise are China and India, both top coal consumers and builders of renewable generation.
Nearly 290 gigawatts (GW) of new renewable power will be commissioned this year – 3 percent higher than 2020’s record growth – with solar photovoltaic (PV) accounting for more than half of all renewable power expansion, followed by wind and hydropower.
The growth comes despite rising costs for key materials used to make solar panels and wind turbines, the IEA said.
Renewables will account for nearly 95 percent of the increase in global power capacity through 2026, with solar PV providing more than half.
The IEA notes, however, that even faster growth in renewables is needed to reach the target of zero emissions by 2050. “That would require renewable power capacity additions over the period 2021-26 to average almost double the rate of the report’s main case,” the agency said.
As it is, by 2026, the IEA is projecting renewable electricity capacity to rise more than 60 percent from 2020 levels to more than 4,800 GW – equal to the global capacity of nuclear and fossil fuel generation combined.
“This is driven by stronger support from government policies and more ambitious clean energy goals announced before and during the COP26 Climate Change Conference,” the agency said.
China remains the global leader in renewable generation and is projected to reach a total of 1,200 GW of wind and solar capacity by 2026 – four years ahead of its 2030 target. On a percentage basis, India is the leader, doubling new installations compared with 2015-2020.
“The growth of renewables in India is outstanding, supporting the government’s newly announced goal of reaching 500 GW of renewable power capacity by 2030 and highlighting India’s broader potential to accelerate its clean energy transition,” Fatih Birol, IEA executive director, said in a statement.
At the same time, India and China are leading a resurgence in coal-fired electricity production.
After declines in coal-fired power generation in 2019 and 2020, this year’s generation is up 9 percent to 10.3 million terawatt-hours – a record high.
Still, coal’s share of the global power mix in 2021 is expected to be 36 percent, 5 percent below its 2007 peak.
Coal’s revival is a function of demand outstripping available low-carbon generation and the rise in natural gas prices, which has made coal more economically competitive.
“Estimated growth of 12 percent in India and 9 percent in China will push coal power generation to record levels in both countries,” the IEA said. “Taking into account the rebound in global industrial output, overall coal demand worldwide is expected to grow by 6 percent in 2021, bringing it close to the record levels it reached in 2013 and 2014.”
Even in the U.S. and the European Union, where coal-fired power plants are being shut down, coal power generation is expected to increase by 20 percent in 2021 but will not reach 2019 levels.
Based on current trends, global coal demand is set to rise to 8,025 million tons in 2022, the highest level ever seen, and to remain there through 2024. The IEA is projecting coal-fired generation to reach an all-time high in 2022 and then plateau.
“Global coal consumption is set to revert to the pattern seen over the previous decade: declines in advanced economies offset by growth in some emerging and developing economies,” the agency said. “After its brief rebound in the United States and the European Union in 2021, coal demand will resume its decline through 2024.”