Renewables catching up with gas: IEA

Wind and solar power keep getting cheaper, and that’s encouraging their adoption even as government subsidies falter, a new report from the International Energy Agency concludes. In just a few years, more power will come from renewables than from natural gas, the report said.

The IEA notes that wind is now competitive with fossil fuels in places such as Brazil and New Zealand. Solar competes with fossil fuels for peak electricity production. But here’s some context: while renewable energy use is growing, so is the use of coal, which means that so far, carbon dioxide emissions continue to rise.

Coal is attractive because it’s cheap, and because it produces electricity on demand—it’s not subject to the time of day or the weather. Can the balance shift? For that utilities need to demonstrate technological solutions to the intermittency of renewable energy. Development of base load sources of renewable power like hydropower and geothermal can also help.

Renewable electricity generation increased strongly worldwide in 2012, and deployment is occurring in a greater number of markets. However, the story of renewable energy development is becoming more complex. Short-term indicators in some regions of the globe have pointed to increased challenges. Despite remaining high, global new investment in renewable energy fell in 2012. Policy uncertainties, economic challenges, incentive reductions and competition from other energy sources clouded the investment outlook for some markets. Some countries and regions have faced difficulties in integrating variable renewables in their power grids. The renewable manufacturing industry, particularly solar and wind, entered a deeper period of restructuring and consolidation. 

Nevertheless, despite economic, policy and industry turbulence, the underlying fundamentals for renewable deployment remain robust. Even with challenges in some countries, more positive developments elsewhere continue to drive global growth. Competitive opportunities for renewables are emerging across traditional and new markets. While OECD countries remain a driver of renewable power development, non-OECD countries are increasingly accounting for overall growth. 

The Medium-Term Renewable Energy Market Report 2013 assesses market trends for the renewable electricity, biofuels for transport and renewable heat sectors.