The International Energy Agency (IEA) has released its World Energy Outlook 2022 report, which states that solar and wind energy are the most important ways to reduce emissions in the power sector. The IEA predicts that the proportion of power generation from these two sources will increase from 10% in 2021 to 40% in 2030 and up to 70% in 2050.
In 2021, solar energy contributed more than 3% of the world’s power generation, with an annual increase in power generation of 150 GW, setting a new historical record. Due to economies of scale and ongoing innovation throughout the supply chain, the cost of solar panels has dropped by 80% over the past decade. As a result, solar power has become the most cost-effective and affordable power generation technology in many regions of the world. The IEA predicts that the annual capacity of new solar installations will exceed 650 GW by 2030, more than four times the current level.
By then, the annual installed capacity of solar and wind energy in the United States will increase by 2.5 times the current level, thanks in part to the introduction of the Infrastructure Investment and Jobs Act. This new target has also spurred China’s large-scale adoption of clean energy, with the country expected to reach its peak coal and oil consumption by 2030. The report notes that the European Union’s accelerated deployment of renewable energy and increased efficiency measures will reduce the bloc’s demand for natural gas and oil by 20% in the 2030s, with coal consumption dropping by 50%.
The average price of solar panels rose for the first time in 2021 due to rising freight and material costs, particularly for polysilicon, with prices increasing by approximately 20% compared to 2020. However, the IEA states that continuous innovation, material improvements, and increased energy efficiency will further reduce costs, although component prices are expected to remain high in the first half of 2022.
The IEA believes that the energy crisis caused by Russia and Ukraine could accelerate the transition to a more sustainable energy system. Although fossil fuel consumption will reach its peak in this decade, it will decline over the long term. The IEA predicts that by 2030, it will require $2 trillion to achieve climate neutrality and technology development plans such as the US’s Infrastructure Investment and Jobs Act, the European Green Deal, and similar initiatives in Japan, South Korea, and China. This represents an increase of more than 50% over current investment levels. However, this will still not be enough to achieve the 1.5°C temperature control target, which would require $4 trillion in investment by 2030.
Governments worldwide have taken steps to make this a decisive turning point in human history, ushering in a new era of cleaner, more affordable, and more secure energy systems. The energy world has undergone tremendous changes, and more are expected in the years to come.
