The International Energy Agency’s latest annual Medium-Term Renewable Energy Market Report was released this week, and according to current trends, renewable energy sources will collectively overtake gas as the world’s second-largest source of energy by the end of this decade.
Renewables—hydro, solar, geothermal, biofuel, and wind—are the fastest-growing energy sector, and an estimated increase in generation capacity of 40 percent over the next five years will mean that by 2018, a quarter of all energy generated globally will come from one of these sources. The majority of that amount—17 percent—will come from hydropower.
The two main reasons for this are cost and deployment—basically, it’s getting cheaper to generate power with renewables, and they’re being rolled out in new places. Developing countries are choosing renewables over fossil fuel or nuclear power generation as their total electricity demand increases, while the continually dropping cost of wind and solar—combined with subsidies—is making it cheaper to roll them out in developed nations.
Renewable energy generation rose by eight percent in 2012 alone, and that means worldwide capacity last year—4,860TWh—is equal to China’s total energy demand.
However, the IEA is careful to make it clear that this isn’t a given. State and private investment is threatened by the poor global economic situation, and that means that those all-important subsidies and research programs could come under threat. Governments sceptical of the need for renewable energy are also a problem.
IEA executive director Maria van der Hoeven said: “Many renewables no longer require high economic incentives. But they do still need long-term policies that provide a predictable and reliable market and regulatory framework compatible with societal goals. And worldwide subsidies for fossil fuels remain six times higher than economic incentives for renewables.”
This story originally appeared on Wired UK.