June 26 (Bloomberg) -- Renewable energy may supply more electricity than nuclear reactors or natural gas by 2016, spurred by declining costs and growing demand in emerging markets, the International Energy Agency said.
Wind, solar, bioenergy and geothermal use may grow 40 percent in the next five years, double the 20 percent pace in 2011, the Paris-based organization said today in a report on the industry. Excluding hydropower, cleaner sources of energy may reach 8 percent of total world electricity generation capacity by 2018, compared with 4 percent in 2011, the IEA said.
The findings are another indication that renewables increasingly are rivaling fossil fuels on price without subsidy as the cost of wind and solar technologies declines. The report suggests ways that governments can do more to reduce the pollution blamed for global warming.
“Renewable power sources are increasingly standing on their own merits versus new fossil-fuel generation,” IEA Executive Director Maria van der Hoeven said in New York today. “Many renewables no longer require high economic incentives.”
Emerging markets will be the largest drivers of the growth for renewables in the next few years, with China accounting for 40 percent, or about 310 gigawatts of new capacity. About 58 percent of total renewable generation in 2018 will come in nations outside the Organization for Economic Cooperation & Development, up from 54 percent in 2012, the IEA said.
Van der Hoeven reiterated the IEA’s push for nations to end fossil fuel subsidies, noting incentives for coal, oil and gas in 2011 “globally were six times higher than renewables” and that “carbon intensity of energy has barely budged in the past 20 years.”
Growth will slow in industrial nations because of subsidy reductions and uncertainty about the government’s support for the technology, said Angus McCrone, an analyst at Bloomberg New Energy Finance. The London-based researcher estimated investment in renewables was $112 billion in 2012 in emerging-market nations, compared with $132 billion for developed economies, the smallest gap ever between the two.
“The places that really need the capacity the most are developing countries and they also have the resources,” McCrone said in an interview.
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