The UAE is a one of the leading countries when it comes to renewable energy competitive auctions, along with European countries, India, the USA, Korea and Brazil.
The auctions, under which countries, through governments, businesses or power utilities, can procure clean power from providers who make bids, make up the largest source of policy-driven growth of renewables, according to the International Energy Agency (IEA).
Other sources of growth include market-driven growth, which accounts for 17% of the world’s utility solar and wind expansion through power purchase agreements (PPAs), which is led by the USA.
The IEA’s Renewable Energy Market Update said renewable power growth is being led by solar photovoltaic (PV) power.
The report said 107 gigawatts (GW) of renewable capacity is to be added in 2023, taking it to 440 GW, equivalent to the entire installed capacity of Germany and Spain.
“This unprecedented growth is being driven by expanding policy support, growing energy security concerns and improving competitiveness against fossil fuel alternatives,” the report said.
“These factors are outweighing rising interest rates, higher investment costs and persistent supply chain challenges.”
Solar PV capacity, including both large utility-scale and small distributed systems, accounts for two-thirds of this year’s projected increase in global renewable capacity, the report added.
The IEA said policy makers in many countries, particularly in Europe, have actively sought alternatives to imported fossil fuels that can improve energy security.
“This shifting focus created a favourable environment for solar PV, especially for residential and commercial systems that can be rapidly installed to meet growing demand for renewable energy.”
The report said solar PV additions will continue to increase in 2024 while challenges remain for wind expansion.
(Writing by Imogen Lillywhite; editing by Daniel Luiz)