Renewable energy will soon beat out natural gas as the second-largest source of electricity worldwide, according to projections from the International Energy Agency.
Electricity from solar, wind, hydropower and other renewable sources will increase by 40 percent in the next five years, making up about 25 percent of the world’s energy sources by 2018. Renewables will provide the second-largest amount of global electricity by 2016, topped only by coal, the number one supplier of electricity around the world. Today, hydropower dominates the renewable energy mix, supplying 80 percent of the world’s renewable electricity, but IEA projects non-hydro sources of renewable energy will double over the next five years, comprising about 8 percent of the world’s energy sources by 2018.
Lower costs are a major contributor to the spike in renewable energy — in many developing countries in Africa and Asia (and some developed ones, like Australia) renewables like wind are actually cheaper than coal. These costs are helping drive higher levels of investment in renewable energy from developing countries looking to meet rising energy demands. Reports published earlier this month found developing countries invested a total of $112 billion in renewable energy in 2012, an increase of 19 percent from the year before. China led the way in this area, upping its investment to $67 billion — an increase of nearly a quarter compared to 2011. The total invested by countries in the Middle East and Africa was much smaller — about $12 billion — but compared to 2011, their investment surged upward by 228 percent.
But renewable energy investment isn’t growing everywhere — it’s actually dropping off in developed nations. The IEA notes that despite the renewable sector’s rapid growth, worldwide subsidies for fossil fuels are still six times higher than subsidies for renewables (the U.S.’s spending reflects the world’s average — in 2011, U.S. fossil fuel subsidies were $523 billion, about six times higher than the $88 billion spent on renewable energy). President Obama pledged in his climate speech Tuesday to double the country’s wind and solar energy and to allow enough private renewable energy development on public lands to powqer 6 million homes by 2020. But governments in Europe, meanwhile, are cutting renewable energy subsidies as austerity measures take hold
Obama also addressed coal’s role in the U.S. energy mix on Tuesday, announcing he would be imposing limits on carbon emissions from existing coal-fired power plants in the U.S., as well as stopping government financing of coal plants overseas. Despite new investments in renewables, coal still dominates the energy market in developing countries like China and India. But its hold on the market may slowly be slipping. In a draft energy strategy statement, the World Bank revealed Thursday that it would be cutting back on the number of coal plants it finances, limiting its support to “rare circumstances where there are no feasible alternatives available to meet basic energy needs and other sources of financing are absent.”