IEA's Renewable Energy Capacity Surge

Investing.com — The International Energy Agency’s (IEA) latest report points to a surge in renewable energy capacity globally, creating opportunities for companies like Nordex and Orsted (CSE:ORSTED).

Both Nordex and Orsted were up 2.3% and 1.2%, respectively, as the IEA’s forecast indicated robust expansion, particularly in wind and solar energy sectors, where both firms have a substantial footprint.

This growth trajectory, according to the IEA, is being driven by strong government policies, declining technology costs, and heightened demand from both private sectors and households.

> “Global renewable capacity is expected to grow by 2.7 times by 2030, surpassing countries’ current ambitions by nearly 25%, but it still falls short of tripling,” the report said.

Wind and solar will account for nearly 95% of this increase, marking a major shift in global energy markets toward clean energy.

The report emphasizes that this expansion will see 5,500 gigawatts of new renewable energy capacity being added globally by 2030, with annual installations growing year-on-year to nearly 940 GW, an increase of 70% from today’s levels.

Nordex, a leading manufacturer of onshore wind turbines, stands to benefit greatly from this accelerated wind energy expansion.

The IEA predicts that wind capacity growth will recover from recent supply chain disruptions and financial challenges to nearly double its expansion rate between 2024 and 2030.

This resurgence is due to improved auction designs, more efficient permitting processes, and enhanced project bankability across major markets like Europe, the United States, and emerging economies.

Likewise, Orsted, a dominant force in offshore wind energy, is poised to take advantage of the IEA’s projection that offshore wind installations will experience rapid growth.

Despite current bottlenecks in supply chains, the offshore sector remains a critical part of future renewable capacity growth.

The IEA notes that ambitious targets in the European Union and countries like the U.S. will drive demand for offshore wind projects, positioning Orsted to capture a major share of this growing market.

The report mentions China’s pivotal role, accounting for 60% of the global renewable capacity expansion by 2030. China’s leadership in both solar and wind, combined with policy support, is expected to transform global energy dynamics.

Similarly, growth in the European Union and the United States, bolstered by policies like the U.S. Inflation Reduction Act and Europe’s renewable energy auctions, will contribute to the rapid expansion of both solar and wind energy.

In addition to wind energy, the IEA underscores that solar energy will be the fastest-growing segment of the renewable sector, contributing 80% of the total renewable energy capacity additions by the end of the decade.

The rapid adoption of solar is driven by falling costs, shorter permitting timelines, and increased social acceptance, particularly in regions where electricity costs are a concern for residential and commercial consumers.

However, the wind sector is expected to rebound strongly from its current challenges, with favorable policy reforms and increased investment unlocking new projects in key markets.

The IEA’s forecast is a clear indication of a transformative period for renewable energy, with Nordex and Orsted positioned at the forefront of this change.

As wind and solar continue to grow as dominant forces in the global energy market, companies that are deeply embedded in these industries stand to see gains.

With government policies accelerating the transition to renewable energy and industry innovations addressing the hurdles, the outlook for these companies—and the renewable energy sector as a whole—appears highly optimistic.