A new IEA forecast sees renewable capacity increase in emerging and developing economies outside China matching that in advanced economies for the first time as Hormuz crisis.

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.

Renewables 2026, this year’s edition of the IEA’s annual report on the sector, sees global renewable power capacity increasing by almost 4.8TW in the 2026-2031 period, almost 60 per cent 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.

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 petrol or diesel sold at the pump. Our forecast for biofuels is revised up by 40 per cent compared with last year’s report.

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, will help shift demand towards periods when renewable power supply is abundant, allowing a better use of variable renewable generation sources.

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