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. But the agency’s latest report says the offshore wind sector is showing a weaker outlook, with projected growth about 25% lower than previous forecasts.
“Offshore wind stands apart, with a weaker growth outlook – around a quarter lower than in last year’s report – resulting from policy changes in key markets, supply chain bottlenecks and rising costs,” the IEA notes in its Renewables 2025 annual report.
The report sees global renewable power capacity increasing by 4 600 gigawatts (GW) by 2030 – roughly the equivalent of adding China, the European Union and Japan’s total power generation capacity combined.
Solar PV will account for around 80% of the global increase in renewable power capacity over the next five years – driven by low costs and faster permitting timeframes – followed by wind, hydro, bioenergy and geothermal. Geothermal installations are on course to hit historic highs in key markets, including the United States, Japan, Indonesia and a host of emerging and developing economies. Rising grid integration challenges are renewing interest in pumped-storage hydropower, whose growth is expected to be almost 80% faster over the next five years compared with the previous five.
In emerging economies across Asia, the Middle East and Africa, cost competitiveness and stronger policy support are spurring faster growth of renewables, with many governments introducing new auction programmes and raising their targets. India is on course to become the second-largest renewables growth market globally, after China, and is expected to comfortably reach its ambitious target by 2030.
At the company level, confidence in renewables remains strong. Most major developers have either maintained or raised their 2030 deployment targets compared with last year, reflecting resilience and optimism in the sector
The report’s outlook for global renewable capacity growth is revised downward slightly compared with last year, mainly due to policy changes in the United States and in China. The early phase-out of federal tax incentives along with other regulatory changes in the United States lowered the growth expectations for renewables in the US market by almost 50% compared with last year’s forecast. China’s shift from fixed tariffs to auctions is impacting project economics, resulting in a reduction in our forecast for renewables’ growth in the Chinese market.
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.
(Dreamstime photo of offshore wind farm)