According to the International Energy Agency, 2015 was a banner year for renewable power, marking the first time that total installed renewable capacity passed coal. The agency just released its analysis of the medium-term prospects for renewables, which includes a look at the state of the global market in 2015. The report predicts that 2015 is only the beginning; by 2021, renewables will generae enough electricity to handle all of the demand in the US and Europe.
As of 2015, hydropower remained the largest global source of renewable electricity, accounting for just over 70 percent of it. But wind power is now 15 percent, and solar has grown from negligible to four percent. The new additions of capacity, however, indicate that these two power sources are just getting started.
Last year saw 153 GigaWatts of renewable capacity added globally, an increase of 15 percent from the year 2014. This was enough to push renewables past coal, becoming the largest source of new capacity. Wind accounted for 66 GW of these additions, with photovoltaics at 49 GW. Combined, that means that 75 percent of the new renewables were solar or wind (the remainder were primarily hydro and biomass). To provide a sense of scale, the IEA notes that this means half a million solar panels were installed every day. Two wind turbines were installed every hour—in China alone.
It's important to note that this doesn't translate directly to 150GW of electricity produced. Well-sited renewable hardware tends to have capacity factors a bit above 30 percent, meaning they only generate a third of their potential capacity. So, we're still generating more electricity using coal than renewables at the moment. But, in a number of markets, the capacity factor for existing coal plants is dropping as they are being undercut by cheap renewables and natural gas. If that situation expands, renewables may pass coal sooner than the raw numbers suggest.
Based on the IEA's projections five years into the future (meaning 2021), that's a reasonable possibility. The agency estimates renewable growth that's 13 percent higher than the projections the agency made in 2014. The addition of renewables will account for more than 60 percent of the new generating capacity and add up to 800GW over the coming five years, keeping them well ahead of any other power source. That'll be driven in part by continued drops in the cost of renewables; while wind is expected to drop by low double digits, photovoltaics are expected to be 25 percent lower than they are already.
All that's assuming that countries don't do anything aggressive to meet their Paris Treaty goals.
Even a non-aggressive approach means that, by 2021, renewables will reshape the energy landscape. Wind and solar will account for nearly a third of renewable generation, pushing hydro to under 60 percent. The total electricity generated by renewables would reach 7600 TeraWatt-hours in 2021, enough to satisfy all the demand in the US and EU.
The IEA expects that the four areas that will dominate renewable installs are China, the EU, India, and the US. But each nation will see different results. For China and India, growing demand means that renewable generation alone won't be able to meet the demand for new capacity by 2021. That means a significant amount of fossil fuel or nuclear plants will have to be brought online in that period. In the EU and US, in contrast, renewable additions will be much larger than the need for increased generation (from a combination of growing demand and retirement of existing plants).
As a result, the EU and US will either retire hardware before its useful lifetime is up or existing fossil fuel plants will be compelled to reduce their capacity factors further.