A report released by International Energy Agency (IEA) says India, China and the U.S. will account for two thirds of global renewable expansion to 2022.
Despite policy uncertainty, the U.S remains the second-largest growth market for renewables, the report said. Multi-year federal tax incentives and state-level policies for distributed solar PV will drive the growth.
India’s moves to address the financial health of its utilities and tackle grid-integration issues drive a more optimistic forecast, according to IEA.
By 2022, India is expected to more than double its current renewable electricity capacity. For the first time, this growth over the forecast period is higher compared with the European Union.
Solar PV and wind together represent 90 percent of India’s capacity growth as auctions yielded some of the world’s lowest prices for both technologies.
More significantly, renewable energy contract prices in some Indian states have become comparable to coal tariffs.
IEA notes that India’s renewable capacity expansion could be boosted by almost a third, providing that existing grid integration and infrastructure challenges are addressed, policy and regulatory uncertainties are reduced, and costs continue to fall. With this, India will match the U.S., becoming the joint second-largest growth market after China.
In the European Union, renewable growth over the forecast period is 40 percent lower compared with the previous five-year period, IEA said. Primarily, weaker electricity demand, overcapacity, and limited visibility on forthcoming auction capacity volumes are cited as the challenges to renewable energy growth. Policy uncertainty is also likely to remain high beyond 2020.
In developing Asia and sub-Saharan Africa, the off-grid capacity in these regions will almost triple during the forecast period, reaching over 3 000 MW in 2022 driven by government electrification programs, and private sector investments.