Renewable Energy Growth Slows Due to Policy Shifts: IEA

Growth in renewable energy, a crucial element in limiting dangerous climate change, is slowing globally due to policy changes in the United States and China, the International Energy Agency (IEA) reported on Tuesday.

The slowdown means that the world will fall short of a key goal set just two years ago: tripling renewable energy output by 2030 to curb global temperature rises.

Global Forecasts and Shortfall

In 2024, the IEA had forecast that the world would nearly meet the target, projecting the addition of 5,500 GW of renewable power. However, in its latest report, the agency now expects only 4,600 GW, equivalent to 2.6 times the 2022 level, due to “policy, regulatory and market changes since October 2024”.

The IEA’s US forecast was cut by nearly 50 percent, reflecting the Trump administration’s early phase-out of tax credits for renewables and stricter project regulations.

In China, the move from fixed tariffs to auctions has affected project profitability, reducing growth expectations. Nevertheless, China still drives most of the global renewable energy expansion and is on track to meet its 2035 wind and solar power target five years early.

Regional Highlights

While growth in the United States and China is slowing, the IEA highlighted positive developments elsewhere:

• India: On track to meet its 2030 target, expected to become the second-largest growth market, with renewable capacity set to increase 2.5 times in five years.
• Middle East and North Africa: Forecasts revised up by 25 percent.
• Europe: Growth projections increased for Germany, Italy, Poland, and Spain.

Technology and Market Trends

Solar power has accounted for around 80 percent of global renewable growth over the past five years, followed by wind, hydropower, biomass, and geothermal.

The outlook for offshore wind has been revised lower due to policy changes, particularly in the United States, where some under-construction projects are facing halts.

Energy Security and Network Flexibility

Renewables are enhancing energy security and reducing reliance on imported fuels.

“The deployment of renewables has already reduced fuel import needs significantly in many countries, enhancing energy diversification and security,” the IEA said.

To cope with the intermittent nature of renewable power, countries will need to increase the flexibility of electricity networks. By 2030, renewable energy is expected to account for 30 percent of global electricity output, roughly double the current share.

The IEA’s report underscores that while policy shifts have slowed growth in key countries, renewable energy remains central to global climate strategies and energy security objectives.