Context Three numbers and three core global energy challenges: 6.5 million premature deaths each year can be attributed to air pollution 2.7 degrees i

Transcription

1 Renewables 217 Heymi Bahar IEEJ, Tokyo 31 October 217

2 Context Three numbers and three core global energy challenges: 6.5 million premature deaths each year can be attributed to air pollution 2.7 degrees is the temperature increase under current climate pledges 1.2 billion people don t have access to electricity and universal access to modern energy remains a distant goal Renewables contribute to meeting all these challenges

3 216 Renewables hitting new records driven by solar PV Power capacity additions by fuel 216 Coal Solar PV Retirements Wind Gas Renewables Additions (GW) Renewables breaking an all-time record accounting for two thirds of global net capacity additions; For the first time solar PV becoming the global leader in net capacity growth

4 Renewable policies spurring more competition Renewable capacity growth by type of policy defining remuneration levels 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % (excluding China) Competitively set Administratively set Competitive tenders with long-term contracts will drive almost half of new capacity growth globally; the timing of policy transition in China may accelerate further this trend

5 Competition driving costs down Wind and solar PV average LCOEs and auction results by commissioning date USD 216/MWh Onshore wind average auction price Solar PV average auction price Solar PV - utility scale LCOE Onshore wind LCOE Japan FIT - PV-utility Price discovery through competitive auctions effectively reduces costs along the entire value chain

6 Offshore wind: bigger turbines, fewer foundations = lower generation costs Offshore wind average turbine size and foundation per MW installed MW Turbine size Foundation per MW installed (right axis) EUR 216/MWh Offshore wind auction results Denmark (contract price) Netherlands (contract price) Germany (contract price) United Kingdom (contract price) Offshore wind generation costs to decline by a third on average in just five years

7 Renewables growth more and more dependent on wind and solar Renewable electricity capacity growth by technology Capacity growth (GW) 9% 8% 7% Additional - accelearated case Other renewables 8 6 6% 5% 4% Hydropower Solar PV % 2% 1% % Wind % from wind and solar PV (right axis) PV enters a new era, becoming the undisputed leader in renewable power capacity growth; growth could be 27% higher led by PV (6%) with enhanced policies addressing regulatory uncertainties and grid integration

8 China continues to lead growth while India overtakes the EU Renewable capacity growth by country/region Capacity growth (GW) China United States EU India Japan Brazil Africa & Middle East main case The forecast is 12% more optimistic vs. last year mainly due to solar PV revisions in China and India

9 China holds the key to the new solar PV era China s share in global solar PV manufacturing and demand 6% 5% 4% 3% 2% 1% % % of China in total manufacturing % of China in global annual additions China influences the global market volumes and prices of solar PV

10 Solar PV to lead China s renewable expansion China cumulative renewable capacity by technology in 216 and GW Hydropower Wind Solar PV Other renewables Main case Additional in accelerated case Hydropower growth slows due to social and environmental concerns; wind expansion is stable despite integration challenges while solar PV growth slowly shifts to distributed generation

11 India: Policy improvements drive more optimistic outlook GW India annual renewable capacity additions Hydropower Bioenergy Onshore wind Solar PV - utility Solar PV - commercial Solar PV - residential Accelerated case UDAY scheme improving financial health of distribution companies and auctions lead to competitive prices; grid integration, further implementation of RPOs and distributed generation remain challenges

12 Japan s FIT revision: an important forecast uncertainty for PV Japan s FIT revision impact on solar PV installations 1 GW AC Certificated Operational Possible cancellation; Grid agreement Possible cancellation; Project plan Possible installation More than half of all previously approved but non-operational PV projects to be cancelled after METI s review while the pace of new approvals remain a forecast uncertainty

13 Solar PV and bioenergy lead Japan s new renewable additions Japan renewable capacity additions GW Hydropower Bioenergy Wind PV - utility PV - commercial PV - residential Other renewables Additional in accelerated case PV accounts for 8% of renewable growth with 21 GW expected in the next five years to reach 63 GW by 222 but if FIT cancellations remain minimal PV capacity could be 16 GW higher

14 ASEAN s non-hydro renewable capacity to double by 222 Cumulative renewable capacity in selected countries in ASEAN in 216 and GW Indonesia Thailand Viet Nam Philippines Hydropower Bioenergy Wind Solar PV Geothermal Energy diversification needs and growing power demand drive renewable capacity growth in ASEAN but grid integration, policy and regulatory uncertainties remain important challenges

15 US tax incentives, RPSs and other state-level incentives remain strong drivers United States annual capacity additions for solar and wind by technology Annual additions (GW) Wind PV - utility PV - commercial PV - residential Annual additions trend for solar and wind affected by tax phase-out schedules but announced policies on trade and tax reform remain important forecast uncertainties.

16 Europe s deployment reflects policy transition Europe renewable capacity growth GW Germany France United Kingdom Hydropower Wind Solar PV Other renewables Europe s renewable capacity is forecast to increase by over one-fifth in 222, led by Germany, France and the UK, with the pace of growth gradually dictated by auction schedules with fixed volumes.

17 SSA and MENA to benefit from wind and PV cost reductions SSA and MENA renewable energy capacity 8 6 GW SSA Other renewables Solar PV 8 6 GW MENA 4 Wind 4 2 Hydropower additions main case Accelerated case additions main case Accelerated case Demand and diversification drive renewable growth in MENA and sub-saharan Africa; expansion could be faster with policy and regulatory clarifications, access to low-cost financing and faster grid upgrades

18 Renewables closing the gap with coal Electricity generation by fuel 12 Generation (TWh) Coal Natural gas Nuclear Renewables Renewable generation to expand by over a third with its share increasing from 24% in 216 to 3% in 222, rapidly closing the gap with coal

19 Wind and solar transforming power sector - system integration becomes key VRE share in annual electricity generation Denmark Ireland Spain Germany United Kingdom Italy Australia United States China India Brazil Japan PV share in 216 Wind share in 216 Additional PV share in 222 Additional wind share in 222 % 1% 2% 3% 4% 5% 6% 7% 8% % of total generation More flexible power systems, adapted market design and policies will have to play a key role in integrating larger shares of wind and solar in a secure and cost-effective way

20 Asia and Brazil drive biofuels production growth Forecast conventional biofuel production growth in key countries and regions Billion L Ethanol Biodiesel Ethanol Biodiesel Ethanol Biodiesel Ethanol Biodiesel United States Europe Brazil Asia Global conventional biofuel production is forecast to grow for 136 billion L to 159 billion L by 222; advanced biofuels output to increase sevenfold but represent only 1% of total biofuel production

21 Renewables to supply almost a third of EV demand in 222 Global electricity consumption by EVs and share of renewable consumption in 216 and forecast for TWh EV-2/3 wheels EV-cars EV-buses Renewable share of consumption 4% 35% 3% 25% 2% 15% 1% 5% % China accounts for almost 9% of global EV electricity consumption in 222, mostly from 2/3 wheelers, and remains the largest electric car market, followed by Europe and the United States.

22 Surging EVs to complement biofuels in renewable transport Biofuels and electric vehicles contribution to renewable energy consumption in road transport % Biofuels EV 2/3 wheelers Electrc cars and buses 7% Share of renewables in road transport increases from 4% in 216 to almost 5% in 222, with biofuels representing 8% of the growth led by Asia & Brazil; EV electricity consumption doubles by 222, with renewables providing 3% of demand

23 Renewable heat slower but steady growth 25 EJ Global final renewable heat consumption 215 and % Modern bioenergy Solar thermal Geothermal Renewable district heat Renewable electricity Bioenergy will dominate growth in absolute terms; electricity accounts for 6% of heat consumption and renewable electricity used for heat is expected to almost double.

24 Progress in renewable heat depends on strong policies 25% 2% 15% 1% Share of renewables in heat consumption by selected countries % of renewables European Union USA India 5% China % Renewables share in heat consumption rises from 9% in 216 to 11% in 222. China leads absolute growth with new targets; EU remains the largest renewable heat consumer while total heat demand outpaces renewables growth in India

25 Concluding remarks Renewables rise by 1, GW to 222, equal to half of current total coal capacity Renewables generation exceeds 8, TWh by 222, equal to total electricity consumption of China, India & Germany combined Solar PV enters a new era leading the growth in renewables, driven by a rapid expansion in deployment & manufacturing capacity in China Despite rapid growth in EVs, decarbonisation of transport is a long way off Only 3% of electricity used by EVs is sourced from renewables Advanced biofuels require specific incentives to bolster deployment Policymakers have to turn their focus to system integration & expanding the use of renewables for heating & cooling

26 Thank you Renewables 217 Team Yasmina Abdelilah Heymi Bahar Emanuele Bianco Ute Collier Karolina Daszkiewicz Pharoah Le Feuvre Megan Mercer Yasuhiro Sakuma Questions and comments: Contact