Renewables could create quarter of world’s electricity by 2018

Calls for an end to subsidies for fossil fuels as the developing world pushes growth in renewables, which are expected to outstrip gas and nuclear by 2016

As the cost of production drops, renewable energy is expected to account for a quarter of worldwide energy generation by 2018, up from a fifth in 2011.

The International Energy Agency (IEA) forecasts a 40% increase in supply from renewables such as wind, solar and hydropower in the next five years.

Global electricity generation from renewable sources will exceed that of gas and be twice that of nuclear by 2016, according to the IEA report.

“Renewable power sources are increasingly standing on their own merits versus new fossil fuel generation,” said IEA executive director Maria van der Hoeven.

The predictions, in the IEA’s latest medium-term renewable energy market report published in June 2013, are largely based on an expected surge in renewable capacity in developing nations. They are expected to account for two-thirds of all growth in renewables up to 2018.

China is expected to make the largest leap by far with its renewable capacity forecast to grow by 750 terawatt hours (TWh) between 2012 and 2018. That compares with a forecast increase of 150TWh in the US, 130TWh in Brazil, 95TWh in India and 70TWh in Germany. One TWh is enough to power a city of 200,000 people for a year.

However, Morocco (25%) and South Africa (20%) are predicted to make the largest percentage gains.

According to the IEA, growing cost-competitiveness versus fossil fuels will help drive growth as well as accelerating investment and deployment. It said that, despite patchy government funding, private investment has remained strong, especially in developing countries.

Ms van der Hoeven called for nations to end subsidies for coal, oil and gas, which she said were six times higher than those for renewables in 2011.

The IEA acts as energy policy adviser to its 28 members, including the US, Canada, Japan and the UK.