28 August 2014: The International Energy Agency (IEA) has launched its ‘Medium-Term Renewable Energy Market Report 2014,’ which finds that policy uncertainty could slow renewable energy expansion over the next five years. While the report projects renewable generation will grow by 45%, and will make up almost 26% of total global electricity generation by 2020, deployment of new renewable power capacity is expected to slow and stabilize after 2014.

As renewables become cost-competitive and no longer need high incentive levels, Organisation for Economic Co-operation and Development (OECD) States must reconsider their policy frameworks, create an environment that fosters a reasonable and predictable return for investors and provide policy certainty, according to the IEA. Non-OECD countries will also have to tackle barriers to renewable energy deployment, through grid integration measures and making financing available.

While most of the growth (70%) in renewables deployment will take place in non-OECD countries, renewable power will only provide 35% of their electricity generation by 2020, according to the projections. With fossil fuels meeting the rest of the demand, the report finds that the world risks failing to meet the renewable generation levels necessary for climate change objectives.

This iteration of the report includes, for the first time, a renewable power investment outlook. The expected average annual investment through 2020 is US$230 billion. While this figure represents a decrease over that of 2013, some of the decline is attributed to decreasing unit costs. Investment is also expected to decline because of the slowing growth in deployment. [IEA Press Release] [IEA Report Launch Announcement]