Global Renewables Surge but 2030 Targets Remain Out of Reach

Global renewable energy deployment continued its record-breaking trajectory in 2024, with new electricity capacity additions climbing 22% to nearly 685GW, according to the International Energy Agency’s Renewables 2025: Analysis and Forecasts to 2030 report. The surge marked the fastest pace of renewable expansion in history, underscoring the sector’s growing role in the global energy system despite persistent policy uncertainty and supply chain disruptions. Yet, IEA warns that this growth, while historic, remains insufficient to meet the COP28 goal of tripling global renewable capacity by 2030. Under existing policies, total renewable capacity is projected to reach 2.6 times its 2022 level by the end of the decade, still below the tripling target.

IEA forecasts another record year ahead, with capacity additions expected to surpass 750GW in 2025 under its main scenario, and potentially reach 840GW if governments accelerate permitting, grid investments, and financing. Solar photovoltaic (PV) technologies remain the engine of this growth, accounting for nearly 80% of global renewable electricity expansion. Wind power, despite higher costs and ongoing supply chain constraints, continues to expand steadily, while hydropower, bioenergy, and geothermal maintain smaller but essential roles in supporting energy security and grid stability.

If current trends hold, global renewable power capacity will double by 2030, adding 4,600GW to the grid, roughly equivalent to the entire power generation capacity of China, the European Union, and Japan combined. 

“The tripling goal is within reach,” the IEA states, “but only if governments reduce policy uncertainty, accelerate grid modernization, and expand flexibility to integrate variable renewables.” The agency’s accelerated scenario sees renewable capacity reaching 2.8 times 2022 levels by 2030, assuming faster permitting and stronger investment in energy storage and transmission infrastructure.

Global Drivers, Constraints

The global expansion is driven by lower solar PV costs, improved permitting frameworks, and widespread public support for clean energy. Solar capacity is expected to more than double within five years, reinforcing its position as the cheapest and fastest-growing source of electricity generation worldwide.

However, IEA’s updated forecast includes a modest downward revision, about 5% lower than last year’s outlook, due largely to policy changes in China and the United States. In the latter, the phaseout of federal tax credits, new import restrictions, and the suspension of new offshore wind leasing have weakened near-term growth prospects. Meanwhile, China’s shift from fixed tariffs to competitive auctions has reduced project margins, though the country still represents nearly 60% of all global renewable capacity additions.

Despite these headwinds, renewable developers remain optimistic. According to the report, one in five large developers have increased their capacity deployment goals for 2030, and three-quarters have maintained them. Corporate power purchase agreements (PPAs) and merchant projects now account for 30% of global renewable capacity expansion, double the share forecast in 2024.

At the same time, manufacturers continue to struggle with profitability. Solar PV module prices have fallen by more than 60% since 2023 amid a global supply glut, pushing major Chinese manufacturers into cumulative losses exceeding US$5 billion since the start of 2024. Wind turbine producers outside China have also reported US$1.2 billion in combined losses over the past year, reflecting the industry’s tight margins even amid record deployment.

The IEA emphasizes that renewable energy expansion is already reshaping global fuel markets. Since 2010, countries that added non-hydro renewable power have reduced fossil fuel import needs by 45%, avoiding cumulative imports of 700Mt of coal and 400Bcm of natural gas, equivalent to US$1.3 trillion in savings.

Latin America’s Renewable Momentum

The Latin America and Caribbean region is projected to add nearly 160GW of renewable capacity by 2030, led by solar PV and wind. Solar alone is expected to match hydropower in installed capacity by the end of the decade, signaling a structural shift in the region’s energy mix.

Three countries, Brazil, Mexico, and Chile, are set to drive more than 80% of this expansion. Brazil leads with about half of all new additions, followed by Mexico and Chile, each contributing around 15%. Hydropower will remain the dominant source of generation, but solar and wind are rapidly gaining ground, with solar expected to produce twice as much electricity in 2030 as it did in 2024.

Still, IEA highlights diverging national trajectories. In Brazil, grid bottlenecks and curtailment, particularly in the Northeast, have slowed project profitability and delayed new connections. Chile faces similar transmission constraints, but the government is responding with grid expansion auctions and rapid battery deployment.

In contrast, Mexico’s outlook has improved. After several years of stagnation, the country’s renewable forecast expanded following the federal government’s announcement of a US$22 billion energy plan in early 2025. The initiative targets 29GW of new power capacity, including 6.4GW from variable renewables, as well as new storage systems, grid reinforcements, and project restarts.

Distributed generation is also surging across the region. In Mexico, distributed solar PV additions reached a record 1GW in 2024, bringing total users to more than half a million. The country’s favorable net-metering program, recently adjusted to allow systems up to 0.7MW, up from 0.5MW, is expected to support an additional 13GW of distributed solar capacity by 2030, particularly in the commercial and industrial segments.

However, market dynamics in Latin America are shifting. The share of market-based procurement in renewable growth has fallen as state-led projects expand, particularly in Mexico. Under the 2024–2030 National Energy Strategy, at least 13GW of new power investment is reserved for CFE, which holds a guaranteed 54% stake in public-private partnerships. This approach aims to balance public control and private collaboration but could limit the space for merchant or unsolicited projects.

Mexico’s Energy Transition at a Crossroads

Mexico’s energy outlook is at a critical juncture. The country’s solar and wind potential remains among the strongest in the world, yet deployment has lagged regional peers in recent years due to regulatory uncertainty and limited grid investment.

According to Wilmar Suárez, Latin America Energy Analyst, Ember, Mexico’s vast solar resources could transform its electricity system and reduce its reliance on imported natural gas, but only if regulatory clarity and investment alignment improve. “High costs are ultimately the result of Mexico slowing down the renewable sector, especially solar,” Suárez said. “As long as government targets and regulatory frameworks are unclear, investment will be lower, the market less attractive, and reaching significant renewable generation levels will be increasingly difficult.”

Ember’s analysis indicates that Mexico could meet up to 90% of its total power generation with 190GW of solar capacity paired with 600GWh of batteries, using less than 0.3% of national land area. To achieve this, however, the country must close the cost gap between domestic installations and global benchmark, a challenge that depends largely on permitting, financing, and stable long-term policies.

Meanwhile, global turbine manufacturer Vestas sees renewed opportunity in Mexico’s wind sector. Eduardo Ricotta, President for Latin America, Vestas, said the country’s geographic diversity gives it a unique edge in combining solar and wind resources.

“Mexico has excellent wind resources in both the north and south, combining wind and solar,” Ricotta said. “Not every country has that, especially in the Northern Hemisphere. This combination positions Mexico to lead with a robust and balanced renewable energy mix.”

Ricotta added that the complementary nature of these technologies, solar peaking at midday and wind strengthening toward evening, allows for a more stable generation profile, especially when paired with hydropower. After years of limited project development, he believes Mexico is poised to reemerge as a regional leader in renewables as new projects and partnerships take shape.

Beyond solar and wind, experts argue that Mexico’s transition must also account for underutilized resources like biomass and biogas. Daniel Salazar, CEO, Electriz, emphasized that thermal energy from biomass could play a transformative role in reducing natural gas imports and boosting local energy sovereignty.

“In Mexico, sufficient biomass is generated to turn the energy sovereignty index from negative to positive,” Salazar said. “There is enough biomass to nearly eliminate natural gas imports, or at least to achieve independence in this area.” He added that industries producing residual biomass, such as agriculture, livestock, furniture, and sugar, could convert waste disposal costs into viable energy businesses.

Salazar also sees promise in biogas, particularly in upgrading it to biomethane for injection into natural gas networks. “Successfully commercializing biogas as biomethane could be a major business opportunity,” he said.

2030 Outlook

IEA projects that Mexico will contribute roughly 15% of Latin America’s total renewable capacity expansion by 2030. If realized, this would mark a significant turnaround from the stagnation of recent years. New government-led initiatives under Plan México, focused on industrial development and energy transition, could help unlock this potential if regulatory frameworks continue to evolve.

IEA’s forecast shows that Mexico’s energy system is already at a structural inflection point. Natural gas will continue to play a central role as a transition fuel, but the diversification of power sources, including solar, wind, biomass, and storage, will be key to ensuring long-term competitiveness and energy security.