(Oil & Gas 360) – Global renewable electricity capacity is projected to increase by nearly 4,800 gigawatts between 2026 and 2031, according to the International Energy Agency, as concerns about energy security and volatile fossil fuel prices accelerate investment in solar, wind and other domestic power resources.The forecast, published November 6 in the IEA’s Renewables 2026 report, represents a 57% increase over capacity additions during the preceding six years. Solar photovoltaic installations are expected to account for more than three-quarters of the expansion.The agency attributes the stronger outlook partly to disruptions in international oil and natural gas markets following the Iran conflict and restrictions on energy shipments through the Strait of Hormuz.Countries seeking to reduce exposure to imported fuels are increasingly prioritizing renewable electricity development alongside investments in grid infrastructure and energy storage.China is expected to remain the largest contributor to renewable capacity growth, although its share is projected to decline from more than 60% in 2025 to approximately 53% over the forecast period.India is emerging as the second-largest growth market, with renewable capacity expected to more than double by 2031.For the first time, renewable capacity additions across emerging and developing economies outside China are forecast to match those in advanced economies.The IEA also raised its U.S. renewable capacity growth forecast by nearly 40% compared with last year’s report, reflecting stronger expectations for solar development and battery storage as electricity demand increases, including from data centers.Globally, renewables are expected to generate nearly 45% of electricity by 2031, compared with 33% in 2025. Solar generation is projected to overtake hydropower in 2029, becoming the largest source of renewable electricity.However, the rapid expansion presents substantial infrastructure and financial challenges.The IEA estimates that approximately 3,000 gigawatts of advanced-stage renewable and storage projects are awaiting grid connections worldwide, representing a 60% increase over the previous year.Insufficient transmission capacity, lengthy permitting processes and limited grid flexibility could delay projects and increase development costs.The agency also warns that renewable electricity curtailment could exceed 800 terawatt-hours annually by 2031, potentially reducing revenues for projects exposed to wholesale electricity prices.Manufacturing economics present another concern. More than 90% of major Chinese solar manufacturers have reported losses in 2026 as excess production capacity pressures equipment prices.For institutional investors, the findings highlight opportunities across renewable generation, transmission, storage and grid modernization, while emphasizing the importance of project economics.Electricity demand growth, financing costs, equipment prices, regulatory structures and access to transmission infrastructure will determine whether additional capacity produces sustainable returns.The IEA’s outlook suggests renewable development will increasingly reflect energy security and economic considerations, but successful investment will depend on the ability of electricity networks and markets to accommodate expanding generation.Disclaimer This informational, opinion, and insights article is provided for informational purposes only and does not constitute investment, legal, or financial advice. The views expressed are based on publicly available information and market conditions at the time of publication and are subject to change without notice.