Fewer wind farms, solar plants, and other renewable power projects are set to be built around the world this year as a result of Covid-19 disruption, marking the first slump in renewables growth in two decades, but the global rollout of clean power capacity is expected to rebound again next year once the crisis eases.

That is the latest forecast issued today by the International Energy Agency (IEA), which said it expects the world to add 167GW of new renewable power capacity in 2020, marking a 13 per cent decline in growth from last year, despite "impressive resilience" from the sector during the pandemic.

Lockdown measures implemented by governments around the world have led to supply chain disruption and a slowdown in construction activity, as well as emerging financial challenges in the global renewables market, the IEA said.

It means the influential agency is now forecasting growth for both 2020 and 2021 at 10 per cent lower than its projections prior to the pandemic outbreak, stunting the rollout of clean energy just as the world needs to ramp up its decarbonisation efforts in pursuit of the Paris Agreement goals.

Even so, overall global capacity for renewable power is still set to grow by six per cent this year and the sector is expected to rebound towards higher growth again next year as most of 2020's delayed clean power projects come online, although the IEA stressed that governments would need to continue to provide supportive renewable power policies in order to enable a rapid recovery.

Dr Fatih Birol, executive director of the IEA, said the resilience of renewable electricity in the face of the global pandemic - which has inflicted huge damage on the oil and coal industries - was positive news, but that its success "cannot be taken for granted".

"Countries are continuing to build new wind turbines and solar plants, but at a much slower pace," he explained. "Even before the Covid-19 pandemic struck, the world needed to significantly accelerate the deployment of renewables to have a chance of meeting its energy and climate goals. Amid today's extraordinary health and economic challenges, governments must not lose sight of the essential task of stepping up clean energy transitions to enable us to emerge from the crisis on a secure and sustainable path."

Almost all mature clean energy markets are being impacted by the coronavirus downturn apart from the US, where developers are rushing to get projects completed before federal tax credits expire. But after record growth last year, Europe is set to see renewable power additions plunge by a third - its largest annual decline since 1996 - with only a partial recovery expected in 2021.

Meanwhile, the medium term US outlook will depend to some extent on the result of November's election. It emerged this week that the Trump administration has ended a two year rent holiday for wind and solar projects on federal land, hitting operators with massive retroactive bills, and Republicans are widely expected to step up hostility to clean energy projects if they are returned to the White House. In contrast, Presidential candidate Joe Biden has promised to introduce a 2050 net zero goal for the US and step up support for renewables. 

The IEA reported that for both this year and next, solar PV is forecast to accounts for more than half of the expansion in renewable power, adding 90GW this year compared 110GW in 2019, the IEA said.

Commissioning delays have also slowed the pace of onshore wind additions this year, it said, although this is likely to be mostly compensated for in 2021 as the majority of delayed projects in the pipeline are already financed and under construction. But the impact of the Covid-19 crisis is likely to be limited for offshore wind, as such projects have longer construction periods, it explained.

But Birol warned the Covid-19 crisis was intensifying existing headwinds for renewables relating to financing, policy uncertainty and grid integration in several major markets, and urged governments to ensure economic recovery stimulus packages prioritised green energy, transport, and buildings.

"The spectacular growth and cost reductions of renewables over the past two decades have been a big success story for global energy markets, driven by innovation in both technology and policies," he said. "But continuing cost declines will not be enough to protect renewables from a range of uncertainties that are being exacerbated by Covid-19. This underlines the critical importance of getting stimulus packages and policy strategies right in order to ensure investor confidence in the months and years ahead."

The IEA's analysis echoes that of consultancy giant EY, which yesterday published its latest Renewable Energy Country Attractiveness Index, highlighting how the global renewables sector will face a slowdown this year, but is well positioned to "bounce back" from 2021 onwards as costs continue to fall and most governments maintain supportive policy environments.