Carbon-free energy is expanding at a record clip, according to the International Energy Agency, with solar power driving the growth and China outpacing every other country.

“This year, the world is set to add a record-breaking amount of renewables to electricity systems — more than the total power capacity of Germany and Spain combined,” IEA Executive Director Fatih Birol said in the rollout of an annual report on renewable energy.

The Paris-based organization expects renewable energy capacity to jump by one-third in 2023. Solar power will account for two-thirds of that added clean energy capacity, and more onshore wind farms are plugging into electric grids after a few down years.

The rising cost of burning fossil fuels and an increase in policy support in the United States, Europe and China are clearing the runways for renewable projects, according to IEA.

On top of that, the world has changed. Russia’s invasion of Ukraine pushed the European Union to shift some of its energy reliance on Russia to domestic sources of renewable power.

Then there’s China, which dominates the global supply chains for electric car batteries and solar panels. It also installs a lot of energy capacity in its own country. By the end of 2024, according to IEA, the majority of wind and solar projects will be in China.

Grid problems: Yet for almost every country, IEA says, integrating all of that distributed wind and solar power onto aging electric grids is the tricky part.

IEA’s Birol said upgrading and expanding electric grids is needed “to ensure we can take full advantage of solar and wind’s huge potential.”

The United States is all too familiar with the issue.

As Congress and the White House punched their way toward an agreement to raise the national debt ceiling, leaders set aside a proposal to change the way electric transmission is sited and permitted.

The Department of Energy and the Federal Energy Regulatory Commission are looking at ways to cut through a complicated state-led process of building out the power grid. FERC is preparing to release a final rule aimed at connecting more renewable energy to the grid.

What’s happening stateside: This year’s expansions in U.S. solar and onshore wind projects come after a tougher 2022. Both markets could see as much as 40 percent growth by the end of the year — as the U.S. economy rebounds from post-Covid supply chain and trade issues.

It could be the tip of the iceberg for the U.S., according to the IEA report. The full impact of the $369 billion federal investment laid out in the landmark 2022 climate law won’t be felt until around 2025.

It’s Friday — thank you for tuning in to POLITICO’s Power Switch. I’m your host, Lamar Johnson. Arianna will be back soon! Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to [email protected]

Today in POLITICO Energy’s podcast: Josh Siegel breaks down the energy policies in the debt limit deal that are leaving Democrats rankled and what’s next in the permitting negotiations.

Looming financial disaster
The nation’s main disaster preparedness organizations are in precipitous financial situations as the states brace for hurricanes and wildfires, E&E News’ Thomas Frank writes.

The Federal Emergency Management Agency could exhaust its Disaster Recovery Fund by August when hurricane season reaches a crescendo in the Gulf of Mexico. Meanwhile, insurance companies in Florida, Louisiana and Texas are unsure if they would be able to pay all their claims should another major storm roll through.

The consequences of the increased climate risks are resonating in California, as well, with the state’s largest insurance company, State Farm, recently announcing it would no longer sell home insurance to anyone in the state due to rising exposure to climate disasters.

Haaland puts 20-year ban on Chaco Canyon oil leases

Interior Secretary Deb Haaland has halted all new oil and gas leases around Chaco Culture National Historical Park in New Mexico for the next 20 years, Heather Richards writes. The area is considered sacred to Native American communities in the state and in northern Arizona.

The move has also sparked a push by advocates calling for a broader ban on new oil and gas leases on public lands.

Debt limit deal to Biden’s desk
The Senate approved a debt limit bill that would give the nation the full authority necessary to pay all its bills through the 2024 election season. The deal includes adjustments to the National Environmental Policy Act and greenlights the completion of West Virginia’s Mountain Valley pipeline, Emma Dumain writes.

The Senate voted on an amendment that would have stripped the pipeline’s approval from the bill, but the effort failed 30-69.

More countries seek EV credits

The Biden administration’s talks with nations over an Indo-Pacific Economic Framework are yielding interest in electric vehicle tax perks. Officials in the Philippines, Malaysia and Indonesia are hoping to get a critical minerals agreement into the trade initiative, Steven Overly writes.

The nations are hoping the initiative could be interpreted as a “free trade agreement” under the Inflation Reduction Act’s production tax credits.

Secondhand (wildfire) smoke: Smoke plumes from wildfires in Nova Scotia have floated down from Canada and are affecting air quality in the Northeast.

Avian murder mystery: Nesting birds were disturbed and strewn to the ground outside a journalist’s porch; the ensuing determination to find the culprit leads to a broader understanding of a non-native bird species.

A showcase of some of our best subscriber content.

Arizona is halting new construction near Phoenix due to projected shortfalls in groundwater supplies. A report from the state’s Department of Water Resources found that the area lacks enough groundwater to fulfill its current commitments for the next century.

The debt limit deal included changes to NEPA as a way to tackle “permitting reform.” With the bill headed to President Joe Biden’s desk, here’s exactly what will change under the new law and how it will affect the environmental review process.

The EPA reached a settlement with three of the largest manufacturers of the “forever chemicals” PFAS over U.S. water supply contamination. The $1.185 billion settlement would create a fund to resolve all PFAS-related claims from public water systems.

That’s it for today, folks. Thanks for reading, and have a great weekend!