LONDON, Dec 1 (Reuters) - Renewable energy should account for nearly 95% of the increase in power capacity in the world through 2026, a report by the International Energy Agency (IEA) showed on Wednesday, with solar power providing more than half the boost. The milestone comes despite rising costs for materials used to make solar panels and wind turbines.New renewable power capacity this year will rise to a second consecutive all-time high in 2021, the Paris-based energy wathdog said in its annual Renewables Market Report. “This year’s record renewable electricity additions of 290 gigawatts are yet another sign that a new global energy economy is emerging,” said IEA Executive Director Fatih Birol.“The high commodity and energy prices we are seeing today pose new challenges for the renewable industry, but elevated fossil fuel prices also make renewables even more competitive.” Renewable electricity capacity by 2026 will equal the current total global power capacity of fossil fuels and nuclear energy combined, the IEA added. More robust government policies and climate goals, advanced by pledges at the COP26 conference in Glasgow last month, are driving the increases but the pace of renewables growth needs to accelerate to limit temperature rises, the IEA said. China leads the world in new capacity and is four years ahead of its own wind and solar infrastructure targets, while India will double new installations from 2015-2020. "China continues to demonstrate its clean energy strengths, with the expansion of renewables suggesting the country could well achieve a peak in its CO2 emissions well before 2030," Birol said. Still, the IEA warned that over the next five years, average annual additions of solar and wind capacity would need to nearly double from the agency"s current predictions to achieve net zero emissions by 2050, while annual demand growth for biofuels would need to quadruple. "To get renewables on track with net zero by 2050, governments not only need to address current policy and implementation challenges but also increase ambition for all renewable energy uses," the IEA wrote. Reporting by Noah Browning; Editing by David Gregorio