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Investing.com -- Global renewable power capacity is forecast to more than double by 2030, with solar photovoltaic (PV) technology leading the expansion, according to the International Energy Agency’s (IEA) latest report released Tuesday.
The IEA’s Renewables 2025 report projects an increase of 4,600 gigawatts (GW) in global renewable power capacity by 2030, equivalent to adding the combined power generation capacity of China, the European Union, and Japan.
Solar PV is expected to account for approximately 80% of this growth, driven by its competitive costs and faster permitting processes. Wind, hydropower, bioenergy, and geothermal energy will make up the remainder of the expansion.
Geothermal installations are projected to reach historic highs in key markets including the United States, Japan, Indonesia, and various emerging economies. Interest in pumped-storage hydropower is also increasing due to grid integration challenges, with growth expected to be almost 80% faster over the next five years compared to the previous five-year period.
"The growth in global renewable capacity in the coming years will be dominated by solar PV – but with wind, hydropower, bioenergy and geothermal all contributing, too," said IEA Executive Director Fatih Birol.
Emerging economies across Asia, the Middle East, and Africa are experiencing faster renewable energy growth due to cost competitiveness and stronger policy support. India is positioned to become the second-largest renewables growth market globally after China and is on track to meet its 2030 targets.
Despite overall optimism, the report’s outlook for global renewable capacity growth has been revised slightly downward compared to last year. This adjustment is primarily due to policy changes in the United States and China. The early phase-out of federal tax incentives in the U.S. has lowered growth expectations by almost 50% compared to previous forecasts, while China’s shift from fixed tariffs to auctions is affecting project economics.
These reductions are partially offset by growth in other regions, particularly India, Europe, and most emerging economies, where prospects have improved due to new policies, expanded auctions, faster permitting, and increasing deployment of rooftop solar.
The report highlights ongoing challenges, including supply chain concentration in China, where key production segments are expected to remain above 90% through 2030. Grid integration issues are also becoming more prevalent as variable renewable energy sources increase, with curtailment and negative price events appearing in more markets.
In the transport sector, renewables’ share of energy use is forecast to increase from 4% today to 6% by 2030, while their share in heating for buildings and industry is expected to rise from 14% to 18% during the same period.
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