Renewable Energy Market Report 213 Michael Waldron Renewable Energy Division International Energy Agency OECD/IEA 213 OECD/IEA 213
MTRMR methodology and scope Analysis of drivers and challenges for RE deployment at country level Regulatory framework, power demand, competition with other fuels, grid integration Bottom up, global RE power capacity and generation forecast, with case studies: USA, Canada, Chile, Mexico Japan, Korea, Australia Denmark, France, Germany, Ireland, Italy, Spain, Turkey, UK China, Brazil, India, Thailand, Morocco, South Africa TWh 1 2 8 4 TWh 1 1 1 5 1 95 Renewable Energy Market Report 213 Power demand vs GDP Y-o-Y Chg 8% 4% % -4% 9-8% 25 28 211 214 217 Demand GDP, Y-o-Y (RHS) Power generation 25 26 27 28 29 21 211 Coal Oil Natural gas Nuclear Hydro Bioenergy Wind Solar PV Geothermal Demand, Y-o-Y (RHS) Global biofuels production by country Regional breakdown RE for heat OECD/IEA 213
Positive outlook for renewable electricity Renewable Energy Market Report 213 TWh 8 7 6 5 Global renewable electricity production, by technology (TWh) IEA 2 C Scenario 3% 25% 2% 4 15% 3 2 1 1% 5% % 26 28 21 212 214 216 218 22 Hydropower Bioenergy Onshore wind Offshore wind Solar PV CSP Geothermal Ocean % Total generation Gas-fired Nuclear generation 216 generation 216 Renewable electricity projected to scale up by 4% from 212 to 218 OECD/IEA 213
Biofuels production growing but leveling off Renewable Energy Market Report 213 Biofuels supply by region Global biofuels supply adjusted for energy content vs road transport oil demand mb/d 2.5 2. 1.5 mboe/d 1.8 1.6 1.4 5.% 4.% 3.% 1. 1.2 2.%.5. 212 213 214 215 216 217 218 Rest of Global Biofuels OECD EUR Biofuels Brazil Biofuels US Biofuels 1..8 1.%.% 212 213 214 215 216 217 218 Biofuels Supply (adj. for energy content) As % of Global Road Transport Demand Biofuels to cover 3.9% of global road transport by 218, But downside risk from growing policy uncertainty in the EU and US; and advanced biofuels not making enough progress OECD/IEA 213
Final energy use of renewables for heat rises by 24% Renewable Energy Market Report 213 As % of final energy consumption for heat, renewables rise to almost 1% in 218, up from just over 8% in 212 and 8% in 26 China accounts for 39% of global growth OECD Europe drives 22% of growth, with EU 22 targets and rising bioenergy (direct use and commercial heat) and solar thermal use Final energy use of renewable sources for heat (including commercial heat) by region EJ 2 18 16 14 12 1 8 6 1 2 3 4 5 6 7 8 9 1 11 12 % RES-H 13 12% 1% 8% 6% 4% 4 2% 2 % 26 27 28 29 21 211 212 213 214 215 216 217 218 OECD Americas OECD Asia Oceania OECD Europe China Brazil India Rest of non-oecd % total heat, World (right axis) Note: excludes traditional biomass OECD/IEA 213
Renewable power spreading out everywhere Renewable Energy Market Report 213 Total Renewable Annual Capacity Additions, by region (GW) This map is without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. Emerging markets more than compensate for slowing growth and volatility in markets such as Europe and the US OECD/IEA 213
Deployment transitioning to more markets Renewable Energy Market Report 213 Non hydro renewable electricity development becoming increasingly widespread more optimistic than MTRMR 212 Number of countries with non-hydro renewable capacity above 1 MW 8 Non-OECD Number of countries (>1 MW) 6 4 2 26 212 218 OECD 26 212 218 26 212 218 26 212 218 26 212 218 26 212 218 26 212 218 Onshore wind Offshore wind Bioenergy Solar PV CSP Geothermal Ocean OECD/IEA 213
Improving competitiveness for renewable power Renewable Energy Market Report 213 Most dynamic technologies onshore wind and solar PV increasingly competitive in a number of markets But market framework matters Deployment with little support occurring in some areas with rising energy needs, good resources, and predictable long term revenues Global levelised costs of power generation ranges (USD per MWh) 5 Utility scale Small scale MTRMR 212 4 3 2 1 Note: costs reflect differences in resource, local conditions, and the choice of sub technology. OECD/IEA 213
Growth of renewable power accelerating Renewable Energy Market Report 213 25 Historical cumulative additions (TWh) 25 Forecast cumulative additions (TWh) 2 2 15 15 1 1 5 5 26 27 28 29 21 211 212 212 213 214 215 216 217 218 Geothermal Solar Bioenergy Wind Hydro Geothermal Solar Bioenergy Wind Hydro Hydropower remains the largest increasing single renewable technology in electricity generation But for the first time additional generation expected from all non hydro sources exceeds that from hydropower; and additional capacity led by wind OECD/IEA 213
Global RE capacity additions led by wind Renewable Energy Market Report 213 25 Total wind (onshore + offshore) annual capacity additions by region (GW) 2 15 1 5 27 28 29 21 211 212 213 214 215 216 217 218 OECD Americas OECD Asia Oceania OECD Europe China Rest of Non OECD Onshore outlook more optimistic than in MRMR 212 Policy uncertainties make additions volatile in some areas Offshore wind outlook more pessimistic than MRMR 212, with financing and integration challenges OECD/IEA 213
Solar PV growing out of Europe PV Annual Capacity Additions (GW) 2 15 1 5 Renewable Energy Market Report 213 3 2 1 212 215 218 212 215 218 2 15 1 5 212 215 218 212 215 218 1 8 6 4 2 3 2 1 212 215 218 5 4 3 2 1 5 4 3 2 1 212 215 218 212 215 218 2 1 212 215 218 212 215 218 Strong growth seen in China, Africa, Middle East, and Latin America 1 8 6 4 2 OECD/IEA 213
But other technologies lagging behind Renewable Energy Market Report 213 TWh 9 8 7 6 5 4 3 2 1 Wind offshore generation projection 26 27 28 29 21 211 212 213 214 215 216 217 218 OECD Americas OECD Asia Oceania OECD Europe Africa Asia China Non-OECD Europe Non-OECD Americas Middle East MTRMR 212 TWh 4 35 3 25 2 15 1 5 Concentrating solar power generation projection 26 27 28 29 21 211 212 213 214 215 216 217 218 OECD Americas OECD Asia Oceania OECD Europe Africa Asia China Non-OECD Europe Non-OECD Americas Middle East MTRMR 212 Potential of offshore power remains high, but technical, financial and grid connection issues pose challenges Storage adds value to CSP, but deployment hampered by relatively high costs OECD/IEA 213
Progress tracked on different scales Renewable Energy Market Report 213 Incremental TWh (212-18) 1. China + 75 2. USA + 15 3. Brazil + 13 4. India + 95 5. Germany + 7 Avg annual growth (212-18) 1. Morocco + 24.9% 2. South Africa + 2.1% 3. Korea + 14.1% 4. Australia + 14.% 5. UK + 13.% Detailed reporting only on 21 focus countries in above tables But other countries also show very significant progress (e.g. Saudi Arabia, UAE, Cambodia, Tunisia, Ethiopia, Kenya) OECD/IEA 213
Non OECD accounts for two thirds of renewable power growth Renewable Energy Market Report 213 In 218, non OECD comprises 58% of total renewable generation, up from 54% in 212 and 51% in 26 China alone accounts for 4% of growth Other key markets: Brazil (wind, bioenergy), India (wind, solar, bioenergy), South Africa and Morocco (wind, solar), Thailand (bioenergy), Middle East (solar, wind) Non-OECD renewable generation by source (TWh) 4 5 4 3 5 3 2 5 2 1 5 1 5 26 27 28 29 21 211 212 213 214 215 216 217 218 Hydro Bioenergy Wind onshore Wind offshore Solar PV CSP Geothermal Ocean % total generation (right axis) 3% 25% 2% 15% 1% 5% % OECD/IEA 213
China sees strong deployment across all RE but grid integration remains challenging Drivers strong government support through FYPs availability of low cost financing eased rules for grid connections and new incentives for small scale projects robust manufacturing and tech. develop. Renewable Energy Market Report 213 Challenges lack of market pricing and priority dispatch in practice grid planning and upgrading for renewables lack of deployment history for less mature technologies 2, 1,8 China renewable power generation 26 18 (TWh) 1,6 1,4 1,2 1, 8 6 4 2 26 27 28 29 21 211 212 213 214 215 216 217 218 Hydro Bioenergy Wind onshore Solar PV Solar CSP Geothermal Ocean Wind offshore OECD/IEA 213
RE largest contributor to total electricity increase in OECD Renewable Energy Market Report 213 TWh 1 1 Changes in power generation by source and region, OECD, 212-18 9 Renewables Nuclear Fossil fuels Others 7 5 3 1-1 Total OECD OECD Americas OECD Asia Oceania OECD Europe Renewables expected to grow almost like fossil fuels in OECD Americas, and more than total demand in Europe OECD/IEA 213
Renewable power and natural gas Gas generation to crowd out renewables? Or vice versa? Renewables and gas can both grow strongly Renewable Energy Market Report 213 Globally: coal to gas switching can lead to large reductions in CO 2 emissions, but gas is not enough to meet 2DS USA: some competition, but strong RE drivers even with low power prices; RE enhances diversification, gas helps balance variable RE; large scope for coal replacement Europe: slow demand growth, high gas prices, overcapacity in some markets; RE crowding out gas; still, gas provides important balancing for rising variable RE Asia: portfolio of low carbon solutions needed to meet rapid demand growth; high LNG prices make RE attractive OECD/IEA 213
Over the long term, the power generation mix is set to change Renewable Energy Market Report 213 Global electricity generation by source, 21 235 TWh 14 12 1 8 6 4 Coal Renewables Gas Nuclear 2 Oil 199 1995 2 25 21 215 22 225 23 235 Source: IEA World Energy Outlook 212 NPS Renewables electricity generation overtakes natural gas in the next few years and almost reach coal by 235 in the New Policies Scenario OECD/IEA 213
Policy uncertainty is the number one risk Renewable Energy Market Report 213 3.5 Spain solar PV + CSP annual additions (GW) 3 2.5 2 1.5 1 Deep financial incentive cuts and cap for solar PV Assumed moratorium on new projects under Special Regime from Jan 212 onwards Abrupt, retroactive policy changes.5 26 27 28 29 21 211 212 213 214 215 216 217 218 Annual additions Projected additions 14 12 1 US onshore wind annual additions (GW) Uncertainty over PTC renewal at end-212 Assumed expiration of PTC at end-213 Stop & go policies 8 6 4 2 Expiration of federal PTC 1998 2 22 24 26 28 21 212 214 216 218 Annual additions Projected additions OECD/IEA 213
Conclusions for policy making Renewable Energy Market Report 213 Many renewables no longer require high economic incentives But they do need long term policies that continue to provide a predictable and reliable market and regulatory framework compatible with societal goals Consistent policy framework more important than specific RE incentive type Competitiveness of renewables depends on market design Fair rules for up front capital intensive technologies and distributed generation will be key OECD/IEA 213
For further insights and analysis Renewable Energy Market Report 213 The Renewable Energy Market Report 213 can be purchased online at: www.iea.org Thank you for your attention! OECD/IEA 213