According to a new report from the IEA, the global energy crisis exacerbated by the war in Ukraine has turbocharged the implementation of renewable energy worldwide. More countries are turning to solar and wind to reduce their dependence on imported fossil fuels.
Global renewable power capacity is now expected to grow by 2,400 gigawatts over the next five years, an amount equal to the entire power capacity of China today.
This expected increase is 30% higher than the amount of growth that was forecast just a year ago, revealing how governments are throwing more policy weight behind renewables. Per the report, renewables are set to account for more than 90% of global electricity expansion over the next five years, overtaking coal to become the largest source of global electricity by early 2025.
“Renewables were already expanding quickly, but the global energy crisis has kicked them into an extraordinary new phase of even faster growth as countries seek to capitalize on their energy security benefits. The world is set to add as much renewable power in the next five years as it did in the previous 20 years,” said IEA Executive Director Fatih Birol in a news release announcing the report. “This is a clear example of how the current energy crisis can be a historic turning point towards a cleaner and more secure energy system.
Added Birol: “Renewables’ continued acceleration is critical to help keep the door open to limiting global warming to 1.5 °C.”
Investors wanting to invest in this growing megatrend of renewable energy may want to consider the actively managed Neuberger Berman Carbon Transition & Infrastructure ETF (NYSE Arca: NBCT). Launched in April, NBCT seeks to invest in companies that are focused on or are transitioning their business to focus on one or more of the following themes:
- Low-carbon resources: issuers focused on producing renewable energy, such as solar, wind, geothermal, and green hydrogen, and the related storage and transport of these energies.
- Electrification: issuers that help enable the replacement of technologies that use higher carbon-emitting fuels with those that use low-carbon resources as a source of energy, including those that support smart grid and electric vehicle-charging solutions, as well as electricity transmission and distribution that helps expand usage of low-carbon solutions.
- Carbon reduction solutions: issuers that directly facilitate the carbon reduction goals of infrastructure owners, including innovative raw materials, industrial gases, engineering and construction service providers, environmental services providers, and environmental technology providers.
For more news, information, and analysis, visit the Megatrends Channel.