Renewable Energy Boomed in 2020—It's 'The New Normal,' IEA Says

The renewable energy sector grew faster than any other year in the past two decades.

wind farm

Yuhan Liao / Getty Images

Despite the global economic slowdown caused by the pandemic, in 2020, renewable energy capacity grew 45% higher than in the previous year, according to the International Energy Agency, which advises governments on energy policy.

Altogether, renewables accounted for about 90% of all the new power capacity added last year, a sign that some governments are starting to turn their backs on fossil fuels.

Greenpeace celebrated the news by tweeting: “The future of energy? Bright and breezy.”

The increase was driven by wind, which grew almost twice as fast as in 2019, while growth in the solar energy sector was 23% higher than in the previous year.

Altogether, renewable energy capacity grew by 10.3% last year, the International Renewable Energy Agency said in late March. 

About half of the new capacity was added in China, where energy companies rushed to complete new plants before the end of 2020 when the government started phasing out subsidies for PV solar and wind energy sectors.

This rapid growth could help China achieve its goal of becoming carbon neutral by 2060, but for that to happen Beijing will need to shut down hundreds of coal-fired power plants, which nowadays generate about 65% of the power the country consumes.

The United States, Vietnam, and several European countries also saw record surges in renewable energy additions. 

Thanks to these investments, by the end of 2020, 36.6% of the electricity generated worldwide was produced using renewable resources, up two percentage points from 2019.

But in order to prevent temperatures from rising above the 1.5 Celsius threshold that scientists say would unleash the worst consequences of climate change, humans will need to generate at least 90% of their electricity using renewables by 2050.

"Governments must build on this momentum by scaling up investment in solar, wind & other renewables as well as the grid infrastructure they need. A massive expansion of clean electricity is crucial to enable the world to reach its net zero goals," tweeted IEA Executive Director Fatih Birol.

2021 and 2022

The good thing is 2021 and 2022 are poised to be boom years for the renewable energy sector, said the IEA, adding that the rapid pace of growth seen last year is set to become the “new normal.”

New developments in the EU and the U.S. will fuel the growth of the renewable energy sector over the next couple of years, and solar PV will take center stage, in large part because production costs are going down.

The growth in Europe will be fueled by pro-clean energy policies as well as corporations, which are increasing the amount of renewable energy they buy through “Power Purchase Agreements” in order to meet ambitious carbon-reduction goals

Germany is forecast to be the European country that will attract the most investments, followed by France, the Netherlands, and Spain. The UK and Turkey are also expected to see strong growth, the IEA said.

Efforts by the Biden administration to move toward a carbon-free energy sector by 2035 will likely lead to a renewable energy surge in the U.S. 

In addition, the U.S. government has extended tax credits for renewable energy companies and has vowed to introduce a “clean energy standard” under which power companies will be required to increase renewable energy generation.

And Biden’s $2 trillion infrastructure plan could spur further growth in the renewable sector, in part because it includes additional tax benefits.

“If enacted, the bill would drive a much stronger acceleration in the deployment of renewables after 2022,” the IEA said, noting that it is unclear whether congressional Democrats will be able to muster enough support to get the bill approved.

China is also expected to see increased investments, in part thanks to further growth in solar PV and new mega-scale hydropower projects.

Growth in India is projected to be strong, too, as facilities that were delayed due to COVID-19 move into the construction phase—although that would depend on whether the Indian government can contain the ongoing pandemic surge.