Abu dhabi: Renewable sources of electricity generation are continuing to grow strongly around the world, with global capacity expected to more than double by 2030, according to the IEA’s latest medium-term forecast. Led by the rapid rise of solar PV, renewables’ expansion is taking place in a context of supply chain strains, grid integration challenges, financial pressures, and policy shifts.
According to Emirates News Agency, the IEA’s main annual report on the sector, Renewables 2025, projects a global renewable power capacity increase of 4,600 gigawatts (GW) by 2030. This growth is roughly equivalent to adding the total power generation capacity of China, the European Union, and Japan combined. Solar PV is set to account for approximately 80% of this increase, driven by its low costs and faster permitting timeframes, followed by wind, hydro, bioenergy, and geothermal energy sources.
In emerging economies across Asia, the Middle East, and Africa, cost competitiveness and stronger policy support are accelerating renewables’ growth, with various governments introducing new auction programs and raising their targets. India is poised to become the second-largest renewables growth market globally, after China, and is expected to comfortably meet its ambitious targets by 2030.
Confidence in the renewables sector remains robust at the company level, with most major developers maintaining or raising their 2030 deployment targets compared to last year. Offshore wind, however, is facing a weaker growth outlook due to policy changes in key markets, supply chain bottlenecks, and rising costs.
The report indicates that the outlook for global renewable capacity growth has been revised downward slightly compared to last year, mainly due to policy changes in the United States and China. The early phase-out of federal tax incentives and other regulatory changes in the United States has reduced growth expectations by almost 50% compared to last year’s forecast. China’s shift from fixed tariffs to auctions is impacting project economics, resulting in a forecast reduction for renewables’ growth in the Chinese market.
These adjustments are partially 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 and increased auction volumes. Corporate purchase power agreements, utility contracts, and merchant plants are also significant drivers, accounting for 30% of global renewable capacity expansion to 2030.
Solar PV is expected to dominate renewables’ growth between now and 2030, remaining the lowest-cost option for new generation in most countries. Wind power, despite its near-term challenges, is set for considerable expansion as supply bottlenecks ease, particularly in China, Europe, and India. Hydropower and other renewable technologies will continue to play crucial roles in supporting electricity systems and enhancing flexibility.
Global supply chains for solar PV and rare earth elements used in wind turbines remain heavily concentrated in China, highlighting ongoing risks to supply chain security. While new investments to diversify supply chains are being made globally, concentration in China for key production segments is expected to remain above 90% through 2030.
The rapid rise of variable renewables is increasing pressure on electricity systems, with curtailment and negative price events already appearing in more markets. This signals the urgent need for investment in grids, storage, and flexible generation. Several countries are beginning to respond with new capacity and storage auctions, but more efforts are required to ensure cost-efficient and secure integration of variable renewables.
The role of renewables in transport and heating is anticipated to rise in the coming years, but only slightly. In the transport sector, their share of energy use is forecast to increase from 4% today to 6% in 2030, driven mainly by renewable electricity for electric vehicles in China and Europe, with biofuels adding growth in Brazil, Indonesia, India, and other key markets. The share of renewables in providing heat for buildings and industry globally is set to increase from 14% to 18% over the forecast period.