IEA trims renewables outlook as US policy shifts and China auction reforms weigh

The International Energy Agency (IEA) on Tuesday (Oct 7) cut its global forecast for renewable power growth by 2030 by 900 gigawatts (GW) from last year’s outlook, citing weaker prospects in the United States and China, even as solar power continues to drive record additions.

Global renewable power capacity is now expected to rise by 4,600 GW by 2030, down from a forecast of 5,500 GW in 2024, with solar accounting for about 80 per cent of the increase, the data showed.

The downward revision is mainly due to an early phase-out of US federal tax incentives and other regulatory changes, lowering the IEA’s US growth expectations by almost 50 per cent, while China’s shift from fixed tariffs to competitive auctions is squeezing project economics.

The downgrade is partly offset by stronger outlooks elsewhere. India is set to become the second-largest growth market after China and is on course to comfortably reach its 2030 target, supported by expanded auctions, faster permitting and a rooftop-solar surge.

Europe’s prospects have also improved on the back of ambitious policies, larger auction volumes and streamlined approvals, while many emerging economies across Asia, the Middle East and Africa are accelerating build-outs as costs fall and targets rise, the report said.

Offshore wind remains a weak spot, with the agency’s growth outlook about a quarter lower than last year due to policy resets, supply-chain bottlenecks and higher costs.

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Pumped-storage hydropower is expected to grow 80 per cent faster over the next five years than in the previous five as grid-integration challenges mount and geothermal installations are on track to hit historic highs in the United States, Japan, Indonesia and other emerging markets.

“The growth in global renewable capacity in the coming years will be dominated by solar,” IEA executive director Fatih Birol said, urging policymakers to tackle supply-chain security and grid constraints.

The agency warned that solar and rare-earth supply chains remain highly concentrated in China, with key segments staying above 90 per cent to 2030. REUTERS