Emerging Economies Top Renewable Energy Investment, Outside China- IEA

The International Energy Agency (IEA) has provided fresh insight into global renewable energy developments , showing renewable capacity increase in emerging and developing economies outside China matching that in advanced economies for the first time as Hormuz crisis sharpens focus on domestic energy sources Renewables, already expanding at a record pace before the current energy crisis, are set to see strong growth across a wider range of countries around the world in the coming years as governments seek to strengthen energy security and reduce their exposure to imported fuels and volatile prices, according to the IEA’a latest report. Renewables 2026, this year’s edition of the IEA’s annual report on the sector, sees global renewable power capacity increasing by almost 4 800 gigawatts (GW) in the 2026-2031 period, almost 60% more than was added in the previous six-year period. Solar PV is set to account for more than three-quarters of global renewable capacity growth to 2031, followed by onshore wind. Amid unprecedented disruptions to global energy markets since the outbreak of the Iran war at the end of February, stronger policy support and intensified energy security concerns are driving faster deployment of renewable power across India, Southeast Asia, Africa and the Middle East. For the first time, the amount of renewable power capacity added in emerging and developing economies outside China is expected to match the amount added in advanced economies in the forecast period. China will remain the largest contributor to the global increase in renewable power capacity, but its share is set to decline from over 60% in 2025 to an average of 53% over the forecast period amid changes to its renewable energy policies. India is emerging as the world’s second-largest growth market, with its total renewable capacity set to more than double by 2031. Growth is also increasing across Southeast Asia, the Middle East and North Africa, and sub-Saharan Africa. Across these regions, the amount of renewable capacity added in the 2026-2031 period is forecast to almost triple compared with the previous six-year period. “Previously, environmental concerns were the policy priority behind the growth of renewables, whose falling costs have made them a competitive option in many markets – but today, it’s mainly energy security that is driving renewables’ expansion as more and more countries seek to reduce their exposure to imported fuels,” said IEA Executive Director Fatih Birol. “The new chapter of the renewables growth story is a truly global one as their deployment spreads well beyond major markets into every corner of the world. This is making them a key pillar of the global power sector. Today, they account for a third of global electricity generation; in the next five years, they will be getting closer to half of it.” The growth in renewable power additions is not only the result of major installations by utilities and developers; it is also being driven directly by consumers in many countries. Faced with high fuel prices and unreliable electricity supplies in some markets, households and small businesses around the world are increasingly turning to more affordable rooftop solar PV systems that can be installed quickly. These small-scale installations have already helped improve electricity services for around 70 million households worldwide, the report finds. The report forecasts that the use of renewable energy for transport will rise by more than 60 per cent by 2031, by which point it will cover 6 per cent of the transport sector’s energy demand worldwide. Renewable electricity used by electric vehicles accounts for around 45 per cent of this increase, while biofuels are making the second-largest contribution. As an immediate response to high fuel prices and availability challenges, several countries, notably in Southeast Asia and Latin America, have raised blending mandates, which set the minimum proportion of biofuels that has to be blended into gasoline or diesel sold at the pump. Our forecast for biofuels is revised up by 40% compared with last year’s report. The report also highlights the importance of secure and diversified supply chains as renewables take on a larger role in energy systems worldwide. India is emerging as an important alternative source of supply, with its share of global solar PV module manufacturing expected to almost double to 17 per cent over the next five years, helping diversify a market that remains highly concentrated. As solar PV and wind continue to expand rapidly around the world, enhancing power system flexibility becomes critically important for energy security, offering new opportunities in the process. The highest priority is for countries to ensure investment in electricity grids keeps pace with the growth of renewable capacity. This should be complemented by reforms to speed up the connection of new renewable power installations to electricity networks. The amount of advanced-stage renewable energy and storage projects waiting for grid connections worldwide increased by 60 per cent over the past year to 3 000 GW, four times the wind and solar PV capacity connected to the grid last year. Meanwhile, the deployment of battery storage has been accelerating in many countries, offering an important way to increase the flexibility of electricity systems rapidly. Measures to enable electricity demand to become more flexible are equally important and can be implemented quickly. Digital technologies, including artificial intelligence, can help shift demand towards periods when renewable power supply is abundant, allowing a better use of variable renewable generation sources. Together, these measures will be crucial to ensuring that the rapid expansion of renewables translates into more secure, affordable and reliable energy supplies worldwide