IEA cuts global renewable energy capacity growth forecast

The IEA lowers its forecast for global renewable energy capacity growth by 2030.

The International Energy Agency (IEA) lowered its forecast for global renewable energy capacity growth by 2030 by 900 gigawatts compared with last year’s estimates, now expecting total additions to reach only 4,600 gigawatts. The revision reflects weaker outlooks in both the United States and China.

The agency’s flagship annual report for the sector, Renewables 2025, said the projected increase in global renewable power generation capacity by 2030 is roughly equivalent to the combined current electricity generation capacity of China, the European Union, and Japan.

The downward revision stems from shifts in energy policies in the world’s two largest economies. In the United States, the early expiry of federal tax incentives and other regulatory measures have halved the growth outlook for renewable energy.

In China, the transition from a fixed-tariff system to competitive auctions has undermined the economic viability of new projects. However, the IEA noted that momentum in other countries is partly offsetting this decline, with India expected to become the second-largest growth market after China.

The report highlighted that solar energy would remain the main driver of global renewable capacity growth in the coming years, accounting for 80% of total additions through 2030. Offshore wind, meanwhile, will remain the weakest link due to rising costs, supply chain bottlenecks and policy adjustments in major markets.

IEA Executive Director Fatih Birol stressed that solar’s dominance in renewable capacity growth requires governments to bolster supply chain security and expand investment in power grids and storage. He warned that more than 90% of solar panel components and rare earth metals used in turbines will continue to be produced in China through 2030.