The U.S. Energy Information Administration (EIA) says renewable energy will grow faster than other electric generating options and will account for nearly a third of the world’s electric generating capacity by the end of 2035.

In its newly released International Energy Outlook 2011 (IEO2011), the nonpartisan statistical and analytical agency within the U.S. Department of Energy says installed renewable energy capacity – including hydroelectric – will grow at a 2.7 percent annual rate through 2035. Solar power will see the largest growth rate, EIA forecasts, at 8.3 percent per year, followed by wind (5.7 percent), geothermal (3.7 percent), hydropower (2.0 percent) and other renewables such as wood waste, landfill gas and agricultural byproducts (1.4 percent).

Although hydro and other renewables will soon surpass coal in generating capacity, because renewable utilization rates are well below those for other types of capacity, coal will remain the world’s dominant generation source in 2035. Still, actual production from renewables will increase at a 3.1 percent rate, highest of all sources, the EIA says. More than 82 percent of the increase will be in hydroelectric power and wind power, even as the rate of new solar installations (starting from a much smaller base) leads the way.

U.S. Energy Information Administration

In particular, the report projects significant growth in the renewable energy markets in China and India as those countries account for half of global energy growth through 2035, when together they will consumer 31 percent of the world’s energy (up from 21 percent in 2008).

U.S. Energy Information Administration

In addition, the EIA estimates that high oil costs and concerns over climate change will encourage a shift to cheaper and cleaner fuels. Installed capacity of power plants burning petroleum products will fall by 1 percent per year. Global installed generating capacity for other conventional generation resources will continue to increase at modest rates, with nuclear leading the pack with an annual growth rate of 2 percent, followed by natural gas (1.6 percent) and coal (1.3 percent).

The EIA notes its report does not reflect potential policy ramifications caused by the damage at Japan’s Fukushima Daiichi power plant this past spring. Rising oil prices are another source of uncertainty.

The entire report is available online [PDF].

– Lauren Craig

This post originally appeared at EarthTechling and was republished with permission.