Renewables 2022 Global Status Report

“RECORD GROWTH IN RENEWABLES, BUT WORLD MISSED HISTORIC CHANCE FOR A CLEAN ENERGY RECOVERY”

stage 2

“Record growth in renewables,
but world missed historic chance
for a clean energy recovery”

After two years of the COVID-19 pandemic, the world was hoping for a green recovery to “build back better”. Yet the global energy transition is not happening. A rebound in economic activity led to a roughly 4% increase in global energy demand, much of which was met by fossil fuels. The spike in energy prices in the second half of the year, followed by the Russian Federation’s invasion of Ukraine in early 2022, contributed to an unprecedented global energy crisis and commodity shock.

The year must serve as a turning point for the energy transition. The crisis facing our current fossil fuel-based energy system is alarming, and we urgently need to transition to renewables in all economic and societal activities. Renewables need to be at the heart of the political response to the energy crisis. Only an energy-efficient and renewable-based economy can be a game changer for a more secure, resilient, low-cost – and sustainable energy system.

  • Renewable Energy Shares in Total Final Energy Consumption for Selected Countries, 2019
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    Progress has been uneven across sectors and mainly in the power sector. Yet we consume most energy in heating and cooling and for transport.
  • Renewable Energy in Total Final Energy Consumption, by Final Energy Use, 2019
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    Progress has been uneven across regions with only 3 countries (Iceland, Norway and Sweden) out of 80 – – having renewable shares in total final energy consumption above 50%.
    stage 3

    End-Use Sectors

    Renewables in POWER

    The greatest success for renewables in 2021 was in the power sector. A record 315 GW of new renewable power capacity was added – enough to power every household in Brazil. The biggest success stories are solar PV and wind, accounting for 90% of all new renewable power additions. Yet current deployment of renewable power is still far from what we need to keep the world on track to reach net zero emissions by 2050.

    • 135 countries have renewable power targets
    • 156 countries have regulatory renewable power policies
    • 3,146 GW of global installed renewable power capacity
    • Levelised costs of onshore wind power and solar PV are now cheaper than fossil fuels on average
    • More than 50% of climate mitigation finance allocated to hydropower, solar PV and wind power

    Renewables in BUILDINGS

    We don’t use enough renewables to heat and cool our homes. The energy used in buildings accounts for around one third of the global final energy demand, yet renewables are progressing only slowly in the sector (only 14.7% of energy use in buildings), representing only a 4 percentage-point increase from a decade before.

    • Electricity supplies 11,7% of heating in buildings
    • 67 countries had mandatory or voluntary building energy codes at the national level
    • Bioenergy grew less than
      1% annually between 2010 and 2020
    • From the climate mitigation finance allocated to buildings, 51% is dedicated to solar thermal water heaters
    • Cooling demand is the fastest growing energy end-use in buildings at around
      4% per year

    Renewables in INDUSTRY AND AGRICULTURE

    The industry sector is the largest energy user, accounting for more than a third of global final energy demand. Yet despite large potential to meet industrial energy demand with renewables (especially for low-temperature process heat), little progress has been made on shifting the sector to renewables. Interest in renewables is picking up in agriculture.

    • 95% of hydrogen was produced by fossil fuels.
    • 38 countries plus the EU have roadmaps for hydrogen production.
    • The industry sector represents 28% of GDP; agriculture represent around 4.3% of GDP.
    • Six countries passed agrivoltaic policies.
    • Agrivoltaic capacity reached more than 14 GW

    Renewables in TRANSPORT

    Progress in the transport sector remains slow. The share of renewables in the sector’s final energy consumption grew only 1.2 percentage points between 2011 and 2019, to 3.7%. Despite a temporary reduction in transport energy demand related to COVID-19, the overall trend is towards rapidly rising demand, with a whopping 24% increase during the decade.

    • Only 28 countries globally have targets for renewable energy in transport.
    • 11 countries and 20 cities had a targeted ban on sales of fossil fuel/ICE vehicles.
    • 31% of mitigation finance is allocated to low-carbon transport.
    • 16 million electric cars in the world‘s roads, about 1% of the global fleet.
    • Sales of electric buses grew more than 40%, bringing e-buses to 4% of the global bus stock in 2022
    stage 4

    Snapshot Map

    This report features a number of Snapshots (case studies) from around the world putting forward stories from 2022; where renewables have been deployed in different end-use sectors (buildings, transport, industry and agriculture) at the national and subnational level. These stories showcase the context, drivers, challenges and achievements, as well as stakeholders involved and are portrayed through policy, markets investment, energy access, system integration and cities lenses.

    • 1

      Snapshot. South Australia

      Looking Beyond 100% Renewables

      South Australia is by far the leader in Australia's energy transition. In just over 15 years, the state has transformed its energy system from heavy coal and natural gas reliance to zero coal and more than 60% renewables, supported by battery storage as well as gas. In 2021, South Australia generated 63% of its electricity from wind and solar power, supported by 22 wind farms, 4 solar farms, 4 grid-scale batteries, 2 world-leading home battery schemes and more than 10 virtual power plants. During nearly half of the days of 2021, renewable energy resources met 100% of the state's operational demand, bringing South Australia well ahead of its target for 100% net renewables by 2030.

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    • 2

      Snapshot. Sweden

      Green Steel Value Chain

      In 2016, the Swedish industries SSAB, LKAB and Vattenfall launched the HYBRIT initiative to decarbonise steelmaking by replacing coking coal with hydrogen for ore-based steel production. The initiative aims to produce steel without using fossil fuels, thereby reducing Sweden's CO2 emissions 10% by 2026. Finland joined the consortium in 2018, aiming to reduce its own CO2 emissions 7%.

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    • 3

      Snapshot. Egypt

      Grid-Connected Small-Scale Solar PV

      In 2016, Egypt adopted a plan to facilitate the transition to clean energy, and the country is targeting 42% renewables in total electricity generation by 2035. To invest in its solar energy potential, in 2017 Egypt established the Grid-Connected Small-Scale Photovoltaic Project (Egypt-PV)i, which promotes pilot PV projects to increase small-scale distributed generation while supporting entrepreneurship, employment and solar capacity. The project finances up to 25% of the upfront costs of a PV system.

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    • 4

      Snapshot. Italy

      Competing Incentives for Renewable Heating and Cooling

      Even when policies are in place to encourage the use of renewable heating and cooling in buildings, they often compete with similar incentives that simultaneously support fossil fuel use. Policy approaches can be contradictory or aim to tackle challenges in an isolated rather than integrated manner. For example, a government may encourage the replacement of old, inefficient and potentially harmful appliances with newer ones, but may do so by introducing a subsidy that also finances fossil fuel technologies.

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    • 5

      Snapshot. Philippines

      Renewable Energy Programme for the Agri-Fishery Sector

      In 2021, the Philippine Departments of Energy and Agriculture announced a new Renewable Energy Programme for the Agri-Fishery Sector. The programme supports the use of renewables to power agricultural and fishery operations such as drying and other heat-based applications, to electrify farm production and processing facilities and machinery, to fuel engines used in irrigation, and to mechanise farm operations. The programme also aims to develop new renewable technologies and human resources specialising in renewables; to develop and enforce new standards for renewables; and to provide technical support for suppliers and manufacturers of locally produced renewable energy equipment and components.

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    • 6

      Snapshot. Bangladesh

      Mujib Climate Prosperity Plan

      The Mujib Climate Prosperity Plan, published in September 2021, serves as Bangladesh's roadmap for climate resilience, energy independence and access, and renewable energy through 2030. Through this plan, the country aims to achieve 30% renewable energy consumption and 30% electrified transport, driven by the need to protect vulnerable communities and encourage economic development. This includes goals to modernise the grid, extend energy access to 100% of the population, replace domestic energy capacity with renewables (including green hydrogen) and achieve 100% clean cooking solutions.

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    • 7

      Snapshot. China

      A Renewable Policy Transition

      China has undergone a major policy change In recent years, shifting its renewable energy pricing from a premium feed-in tariff (FIT) model to a “grid parity” model where renewable and coal plants sell electricity at the same price. The country's National Energy Administration stopped approving FITs for new renewable projects in 2018, followed by a decision to phase out key FIT support schemes, including: for utility-scale, industrial and commercial rooftop solar PV systems and onshore wind power by the end of 2020; for residential solar PV power by the end of 2021; and for offshore wind power by the end of 2022. The move was driven by backlogs in FIT payments and by the plunging cost of PV modules, which has made systems more affordable. The central government policy permits local subsidisation of offshore wind power and CSP at a regional level, with Guangdong becoming the first province to provide such a subsidy in mid-2021.

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    • 8

      Snapshot. Chile

      Heating and Cooling Strategy

      Chile's National Heat and Cold Strategy, issued in 2021, aims for 80% “sustainable” energy use in household heating and cooling by 2050, including a 65% reduction in the greenhouse gas emissions from supplying heat and cold by 2050. These goals are to be met through renewables, including replacing fossil fuels with biomass energy or with solar PV plus electric heat pumps. The Strategy also promotes district energy projects using ground- and air-source heat pumps, as part of a goal to assure that 75% of Chilean residents can meet their heating and cooling needs in a sustainable, reliable and affordable way. The strategy aims to improve health, create new jobs, increase savings, and decrease emissions and fossil fuel dependency.

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    • 9

      Snapshot. Cyprus

      Renewable Energy and Energy Efficiency

      In 2021, Cyprus implemented a new financial incentive focused on energy efficiency and renewables in residential buildings. The funding encourages homeowners to install efficiency measures such as insulation and new windows and doors, as well as solar PV, battery storage, heat pumps and smart energy management systems. With the help of a qualified expert, homeowners can decide on the work required to reduce household energy consumption at least 60%. The government will reimburse 60-80% of the eligible renovation budget, depending on the homeowner's income status. The European Regional Development Fund and the Cyprus government are co-financing the project, which kicked off in March 2021 with a budget of EUR 30 million (USD 33.9 million).

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    • 10

      Snapshot. Mauritius

      EV Charging Using Solar PV

      In late 2021, the state-owned electric utility of Mauritius initiated a policy to incentivise the deployment of 20 MW of household and commercial solar PV systems for charging EVs. Customers accepted to the programme will be permitted to install the solar systems to power their vehicles, and eligible customers will be able to deduct the full cost of the system from their income tax. Any excess electricity generated by the solar PV systems will be exported to the grid and bought by the utility under a gross metering approach. This programme is part of the country’s goal to reach 35% renewable electricity by 2025 and 60% by 2030.

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    • 11

      Snapshot. Argentina

      Using Wind Power to Produce Hydrogen for Export

      In 2021, the Australian company Fortescue Future Industries, a subsidiary of Fortescue Metals Group Ltd., announced that it would develop one of its five largest green hydrogen projects in Sierra Grande, a former mining town in eastern Argentina's Río Negro province. The company plans to install the project, powered by 2 GW of new onshore wind power capacity, along the Patagonian steppe, investing USD 8.4 billion. The region has outstanding wind resources but lacks a power grid and adequate road infrastructure.

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    • 12

      Snapshot. El Salvador

      Geothermal Heat Use in Agriculture

      Agricultural practices can require prolonged, high-temperature heat to yield final food products. Globally, communities and companies have been using the by-product heat from nearby geothermal plants to help improve processes for local producers. Because of its proximity to the geothermally active Ring of Fire area, Latin America has the potential for an estimated 70 GW of geothermal energy.

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    • 13

      Snapshot. Germany

      Rapid Growth in the Heat Pump Market

      Germany's heat pump market expanded considerably in 2020 – up 41% relative to 2019 – and entered the European top three for the first time ever. This expansion continued in 2021, with the market growing 28% for an annual total of 154,000 units sold. The German market is dominated by air-to-water heat pumps (increasing from a 79% share in 2020 to 82% in 2021), followed by ground-source heat pumps (18% in 2021).i The federal government also has set a target of a cumulative six million heat pumps to be installed by 2030 – six-times the stock of 2020

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    • 14

      Snapshot. Chad

      Solar PV for Electricity Access

      Chad, a landlocked country in north-central Africa, has one of the lowest electricity access rates in the world. Only 8% of the population had access to electricity in 2019, with a significant gap between rural (1%) and urban (20%) areas. Apart from a 1 megawatt (MW) wind power plant in the eastern town of Amdjarass, electricity is supplied only by generators, which break down regularly. Oil, used to run clusters of generators, is expensive and highly polluting. This precarious energy situation hinders socio-economic development and affects quality of life, especially in Chad’s second largest city, Abéché. With 80,000 inhabitants, Abéché is not connected to the national grid and has struggled to develop its infrastructure due to security challenges.

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    • 15

      Snapshot. Africa

      Gender-Integrated Energy Access Programmes

      Solar Sister, a network of women entrepreneurs operating across several countries in Africa, has provided 3 million people with access to clean energy as of April 2022. The social enterprise is unique because of its focus on empowering women to build sustainable businesses in their communities. The programme recruits, trains, and supports women entrepreneurs, and supplies them with off-grid solar products (such as solar lighting) and clean cook stoves to sell.

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    • 16

      Snapshot. New Zealand

      Funding Renewable Energy via Green Banks

      In 2019, the government of New Zealand established New Zealand Green Investment Finance (NZGIF) with initial capital of NZD 100 million (USD 68.3 million). This “green bank” is mandated to reduce greenhouse gas emissions by enabling capital flows and increasing direct investment (in the form of equity and debt) in target sectors such as transport, process heat, energy efficiency, agriculture, distributed energy resources, plastics and waste. In 2021, the bank received a further NZD 300 million (USD 205 million) in capital investment, quadrupling its initial pool in only two years, to NZD 400 million (USD 273.3 million). So far, the investments have resulted in lifetime emission reductions of around 250,000 to 300,000 tonnes of CO2.

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    • 17

      Snapshot. Spain

      Investing in Renewables to Tackle Energy Poverty

      Globally, the COVID-19 pandemic and energy crisis have increased energy poverty and exacerbated the risk to households of becoming energy poor. Spain is among the European countries most adversely affected by this risk, as it has some of the highest electricity prices in the region. In 2020, energy poverty impacted an estimated 17% of the population, and 10.9% of inhabitants could not properly heat their homes.

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    • 18

      Snapshot. South Africa

      Linking Divestment with Clean Energy

      South Africa is the largest coal producer and consumer in Africa. Coal contributes more than 70% of the country's energy supply and accounts for 86% of its electricity generation. However, during the UN climate talks in Glasgow in 2021, the South African government took a major step towards divesting from coal by announcing the Just Energy Transition Partnership, or “South Africa Deal”, in conjunction with the EU and the governments of France, Germany, the United Kingdom and the United States.

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    • 19

      Snapshot. Hawaii

      Using Energy Storage to Optimise Delivery of Renewables

      The US state of Hawaii has experienced rapid uptake of renewables in recent years, with some islands producing up to 300% of their local electricity demand from solar and wind power. Traditionally the most expensive state for electricity, Hawaii is benefiting from its renewable energy abundance to drive policy change and reduce both curtailment and fossil fuel use during peak hours. Hawaii was the first state to set a 100% renewable portfolio standard (by 2045) and reached 29.8% renewable generation in 2019.

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    • 20

      Snapshot. South Australia

      Solar Sponge Tariff

      As renewables start supplying larger portions of the electricity mix, cities and states are finding non-storage-based solutions to meet the challenges of integrating variable renewable energy sources such as wind and solar. In 2021, the state of South Australia briefly set a record by producing 143% of its electricity demand from local renewables. While battery storage absorbs some of the excess generation, South Australia uses additional strategies to distribute the surplus while also building more wind and solar parks.

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    • 21

      Snapshot. Belgrade, Serbia

      Decarbonising Transport and Boosting Renewables

      In 2021, the City of Belgrade announced its climate action plan, earmarking EUR 5.2 billion (USD 5.8 billion) through 2030 to reduce greenhouse gas emissions in an effort to combat climate change and improve local air quality. This strategy is part of efforts to reduce growing climate risks, such as extreme heat, heavy precipitation and drought.

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    • 22

      Snapshot. Helsinki, Finland

      Revamping District Heating

      In Finland's capital Helsinki, more than half of all district heat is produced from coal, resulting in the heating sector contributing well over half of the city's greenhouse gas emissions. Pushed by the national ban on coal in energy production as well as Helsinki's goal to become carbon neutral by 2030 (moved up from 2035), the city launched a global competition to revamp its district heating system. As part of this Helsinki Energy Challenge, the city announced a USD 1 million prize competition for the submission of master plans that eliminate coal-based heat without increasing the share of heat from biomass.

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    • 23

      Snapshot. Durban, South Africa

      Using Tenders to Finance 100% Renewable Electricity

      In mid-2021, Durban (eThekwini) in South Africa passed its Transition Policy, building on the city's 2020 Climate Action plan, which targets 40% electricity from low-carbon technologies by 2030 and 100% by 2050. As part of this plan, the city launched a tender in 2021 to procure up to

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    • 24

      Snapshot. Paris, Rouen and Le Havre, France

      Co-operation on Renewables

      The French cities of Paris, Rouen and Le Havre recently pooled their resources and approved the creation of Axe Seine Energies Renouvelables, a local mixed-economy company, in early 2022. The company aims to develop

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    • 25

      Snapshot. US Cities

      Community Choice Aggregation

      Power distribution in the United States operates under a natural monopoly system: due to high upfront costs, power utilities have exclusive coverage territories where they alone generate, distribute and transmit electricity. To expand the options, cities and municipalities across the country have started to use Community Choice Aggregation (CCAs) to procure renewable electricity on behalf of residents. By bundling demand and acting as a large energy buyer, a CCA can create large contracts, demanding cheaper rates and a cleaner energy mix.

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    • 26

      Snapshot. Essen, Germany

      Solar Subsidies

      Essen, Germany has launched both a solar programme and a green roof programme in the city. Based on a council decision in June 2021, the municipality started in January 2022 to provide financial subsidies for households and businesses to install solar PV and solar thermal systems. This is part of Essen’s target to deploy more than 2,200 new solar PV installations by 2026, which would double the number of existing installations.

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    stage 5

    KEY TRENDS IN RENEWABLES

    01

    Global Overview

    Renewables experienced yet another year of record growth in power capacity, despite aftershocks from the pandemic and a rise in global commodity prices that upset renewable energy supply chains and delayed projects. The role of renewables in improving energy security and sovereignty by replacing fossil fuels became central to discussions, as energy prices increased sharply in late 2021 and as the Russian Federation’s invasion of Ukraine unfolded in early 2022.

    02

    Policy Landscape

    Policy support for renewables remained strong throughout 2021, particularly in the power sector. By the end of 2021, nearly all countries had in place a renewable energy support policy, with most support continuing to occur in the power sector and fewer efforts to accelerate renewables in buildings, transport and industry. Electrification of end-uses such as heating and road transport has emerged as a focus for decision makers, also supported by expanding bans on fossil fuels.

    03

    Market and Industry Trends

    Renewable energy continued to grow in 2021. Modern bioenergy provided 5.3% of total global final energy demand in 2020, accounting for almost half of all renewable energy in final energy consumption. New geothermal power generating capacity of 0.3 GW came online in 2021, bringing the global total to around 14.5 GW. In the power sector, the biggest success stories are solar PV and wind, together, accounting for nearly 90% of all new renewable power additions. In comparison, only 27 GW of hydropower capacity was brought online in 2021, and for the first time concentrating solar thermal power experienced a decrease in installed capacity, while the potential for ocean power remains largely untapped. While heat pumps met only around 7% of global heating demand in residential building, they are becoming more common in new buildings.

    04

    Distributed Renewables for Energy Access

    By the end of 2021, 90% of the global population had access to electricity, although 2.6 billion people still lacked access to clean cooking, relying mostly on traditional use of biomass. In 2021, the market for small off-grid solar devices continued to face supply issues, shortages, and price increases, although there were signs of recovery compared to 2020.

    05

    Investment Flows

    Renewable energy investment reached a record high in 2021 despite impacts from the COVID-19 pandemic. Global new investment in renewable power and fuels (not including hydropower projects larger than 50 MW) reached an estimated USD 366 billion in 2021, a record high. Solar PV and wind power continued to dominate new investment, with solar PV accounting for 56% of the total and wind power for 40%.

    06

    Renewable-based Energy Systems

    The share of variable renewable energy sources (wind and solar) in the global electricity mix exceeded 10% for the first time in 2021. The rise of increasingly cost-effective energy storage combined with greater demand-side flexibility and the expansion of transmission infrastructure is making it possible for regions with widely differing resource endowments to transition to fully renewable-based power systems.

    07

    Renewables in Cities

    City governments used a broad range of targets, policies and actions to show local commitment to renewables. By the end of 2021, around 1,500 cities had renewable energy targets and/or policies, collectively covering more than 1.3 billion people, or 30% of the global urban population. In line with global trends, net zero announcements skyrocketed, with targets present in more than 1,100 cities.

    stage 5

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