Renewables Press conference London, 08 October 2018 IEA OECD/IEA 2018

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1 Renewables 218 Press conference London, 8 October 218 IEA

2 Global emissions are set to increase in again Global energy-related CO 2 emissions Gt CO CO 2 emissions Increase in Despite need for early emission reduction, the world is not moving towards the Paris goals but rather away from them 2

3 Context n Renewables grew three times faster than total energy demand in 217 but this was not enough to stop global CO2 emissions from rising n Solar PV capacity rose faster than any other fuel in 217 driven by China; offshore wind installations broke a record with auction prices showing significant cost reduction potential n Shining light on a blind spot - modern bioenergy is critical to environment, energy markets and investment n Today modern bioenergy accounts for half of all renewable energy consumption - four times solar PV and wind combined - and has a huge untapped potential n The world energy system has a number of blind-spots that require policy attention to achieve a secure, sustainable and affordable energy system 3

4 Modern bioenergy: the overlooked giant of renewables Total final energy consumption from renewables, 217 Total final energy consumption from renewables by sector, 217 9% 31% 4% 6% Modern bioenergy 5% Hydropower Wind Solar PV Other renewables Electricity from renewables Electricity Heat Transport Mtoe Modern bioenergy is the only renewable source that can provide electricity, direct heat and transport fuels Two thirds of modern bioenergy heat is used in industry 4

5 Modern bioenergy set to lead renewables growth Mtoe Modern bioenergy Total energy consumption growth of renewables over Solar PV Wind Hydropower Total renewable energy consumption is expected to increase by almost 3% over , covering 4% of global energy demand growth 5

6 Renewables share of energy consumption increases by one-fifth 3% 25% 2% 15% 1% 5% % Share of renewables in the electricity, heat and transport sectors % Renewable electricity Renewable transport Renewable heat % of renewables in total energy consumption Electricity contributes two-thirds of renewables growth But electricity accounts for less than 2% of total final energy consumption 6

7 China becomes the largest RE consumer, Brazil has the highest share Renewables contribution to energy consumption by country in 217 and 223 Mtoe 5% 4% 3% 2% 1% % European Union China United States Brazil India Modern bioenergy Hydropower Wind Solar PV Others % of renewables (right axis) China accounts for the largest absolute growth over the forecast period surpassing the EU, while renewable energy consumption in India increases by 5% 7

8 Solar PV expansion in electricity larger than all renewables combined Renewable electricity capacity growth by technology 7 GW Wind PV-utility PV-distributed Hydropower Other renewables China remains the absolute solar PV leader by far, holding almost 4% of global installed PV capacity in 223 The US remains the second-largest growth market for solar PV, followed by India, whose capacity quadruples 23 8

9 Asia and Latin America dominate biofuel production growth Biofuel production growth Billion L Brazil United EU China India ASEAN States Ethanol Biodiesel Renewables consumption in transport in 223 Road biofuels Aviation biofuels Maritime biofuels Rail electricity Road electricity Other electricity Biofuels production grows by 16%; EVs electricity consumption triples, with renewables providing 3% of demand from electrified transport by 223 9

10 Biofuels open new avenues for more sustainable aviation Cost premium of commercial aviation biofuels (15% blend) per passenger from London 35 Cost per passenger (USD) Sydney Tokyo Delhi New York Berlin Policies remain key to bridge the cost gap between aviation biofuels and fossil jet fuels The most efficient aircraft could reduce fuel costs by around 15% 1

11 Waste: a key resource for greener cement production Bioenergy and waste consumption in the cement industry by country Mtoe Cement production by country, 217 United States 2% The share of bioenergy and waste in the cement industry could be doubled if the robust waste management frameworks present in Europe were replicated in large producing countries 3% 25% 2% 15% 1% % China India EU United States Bioenergy and waste consumption in 217 % of bioenergy and waste in 217 (right axis) Bioenergy and waste 223 potential 5% EU 5% RoW 3% India 6% China 57% 11

12 Accelerated deployment is possible with right policies Mtoe Renewables upside potential over Electricity sector accelerated case Bioenergy scale-up potential for selected sectors Renewables excl. bioenergy Bioenergy for power Road transport biofuels Bioenergy in cement Sugar and ethanol electricity Aviation biofuels Policies could accelerate renewable electricity growth by 25%; bioenergy could accelerate RE consumption across all sectors with an enhanced use of available waste resources 12

13 Conclusions n Even with ongoing cost reductions, government policy remains crucial to attract investment in renewables, ensure appropriate market design and for reliable & cost-effective system integration n Greater use of solar, wind, bioenergy & other renewables together with energy efficiency & other clean energy technologies is needed in all sectors for emissions to peak immediately then decline n Modern bioenergy will continue to lead renewables growth in the next five years and its untapped potential remains huge particularly in China, India, Brazil and the EU n Further accelerating the use of modern bioenergy hinges on policies and incentives to foster innovation & strict sustainability regulations n The IEA will continue to shine a light on energy blind spots : trucks, air conditioners, petrochemicals, modern bioenergy now and more to come 13