Renewable energy is the technology of choice in electricity markets with almost two-thirds of global capacity additions to come from clean power by 2040, according to the International Energy Agency.
IEA said in its ‘World Energy Outlook 2018’ report that green power will rise to 40% of the global power mix by 2040, up from 25% currently.
Key to the growth will be the influence of government, with 70% of total global energy investments government-driven, the agency said.
IEA executive director Fatih Birol said: “Crafting the right policies and proper incentives will be critical to meeting our common goals of securing energy supplies, reducing carbon emissions, improving air quality in urban centres, and expanding basic access to energy in Africa and elsewhere.”
IEA added that increased renewables will bring environmental benefits but also a new set of challenges that policymakers will have to address.
“With higher variability in supplies, power systems will need to make flexibility the cornerstone of future electricity markets in order to keep the lights on,” it said.
Increased solar and wind capacity will need market reforms, grid investments and improvements in demand-response technologies, such as smart meters and battery storage technologies, the report said.