Global renewable capacity additions are set to soar by 107 gigawatts (GW), the largest absolute increase ever, to more than 440 GW in 2023. This is equivalent of more than the entire installed power capacity of Germany and Spain combined. This unprecedented growth is being driven by expanding policy support, growing energy security concerns and improving competitiveness against fossil fuel alternatives. These factors are outweighing rising interest rates, higher investment costs and persistent supply chain challenges.
Solar PV capacity, including both large utility-scale and small distributed systems, accounts for two-thirds of this year’s projected increase in global renewable capacity. In response to higher electricity prices caused by the global energy crisis, policy makers in many countries, particularly in Europe, have actively sought alternatives to imported fossil fuels that can improve energy security. This shifting focus created a favourable environment for solar PV, especially for residential and commercial systems that can be rapidly installed to meet growing demand for renewable energy. These smaller distributed PV applications are on track to account for half of this year’s overall deployment of solar PV – larger than the total deployment of onshore wind over the same period.
Following two consecutive years of decline, onshore wind capacity additions are on course to rebound by 70% in 2023 to 107 GW, an all-time record amount. This is mainly due to the commissioning of delayed projects in China following last year’s Covid-19 restrictions. Faster expansion is also expected in Europe and the United States as a result of supply chain challenges pushing project commissioning from 2022 into 2023. On the other hand, offshore wind growth is not expected to match the record expansion it achieved two years ago due to the low volume of projects under construction outside of China.