© OECD/IEA 2013 Medium‐Term Renewable Energy Market Report 2013 Michael Waldron Senior Energy Market Analyst Renewable Energy Division International Energy Agency
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© OECD/IEA 2013
Medium‐Term Renewable Energy Market Report 2013Michael WaldronSenior Energy Market AnalystRenewable Energy Division International Energy Agency
© OECD/IEA 2013
Methodology and ScopeAnalysis of drivers and challenges for RE deployment at country level
Regulatory framework, power demand, competition with other fuels, grid integration, etc.
Bottom‐up global RE power capacity and generation forecast, with case studies on key markets:
USA, Canada, Chile, MexicoJapan, Korea, AustraliaDenmark, France, Germany, Ireland, Italy, Spain, Turkey, UKChina, Brazil, India, Thailand, Morocco, South Africa
-8%
-4%
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8%
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2005 2008 2011 2014 2017
Y-o-YChgTWh Power demand vs GDP
Demand Demand, Y-o-Y (RHS)GDP, Y-o-Y (RHS)
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1 200
2005 2006 2007 2008 2009 2010 2011
TWh Power generation
Coal Oil Natural gasNuclear Hydro BioenergyWind Solar PV Geothermal
Global biofuels production by countryRegional breakdown RE for heat
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2010 2011 2012
USD billion
United States EuropeBrazil Other AmericasChina IndiaOther Asia Middle East and Africa
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2010 2011 2012
GW
OECD Americas OECD Asia Oceania OECD Europe Africa Non-OECD Asia ChinaNon-OECD Europe Non-OECD Americas
Despite Challenges, strong Renewable Drivers in 2012
Global renewable new investment, by region
Global renewable electricity capacity, by region
Source: IEA MTRMR 2013
Source: Bloomberg New Energy Finance
Total renewable capacity and generation grew strongly in 2012 (+8%)
Strength partly due to China hydropower
Global non‐hydro capacity grew by 21% year‐on‐year
Onshore wind and solar PV capacity grew faster than expected
Still, some emerging challengesGlobal investment fell (‐12%)
Policy uncertainty in some key countries
Grid integration issues emerging
Biofuels production growth stalled
© OECD/IEA 2013
Renewable electricity projected to scale up by 40% from 2012 to 2018
Positive outlook for renewable electricity
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15%
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30%
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1 000
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2006 2008 2010 2012 2014 2016 2018 2020
TWh
Hydropower Bioenergy Onshore windOffshore wind Solar PV CSPGeothermal Ocean % Total generation
IEA 2° C Scenario
Global renewable electricity production, by technology (TWh)
Gas-fired generation 2016
Nuclear generation 2016
© OECD/IEA 2013
Renewable power spreading out everywhere
Emerging markets more than compensate for slowing growth and volatility in markets such as Europe and the US
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.
© OECD/IEA 2013
Improving competitivenessMost dynamic technologies – onshore wind and solar PV –increasingly competitive in a number of marketsBut 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)
Note: costs reflect differences in resource, local conditions, and the choice of sub‐technology.
MRMR 2012
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500Small scaleUtility scale
© OECD/IEA 2013
Growth accelerating for the whole RE power mix
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2012 2013 2014 2015 2016 2017 2018
Geothermal Solar Bioenergy Wind Hydro
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2006 2007 2008 2009 2010 2011 2012
Geothermal Solar Bioenergy Wind Hydro
Hydro remains the largest increasing single renewable technologyBut for the first time additional generation from all non‐hydro sources exceeds that from hydro
Historical cumulative additions (TWh) Forecast cumulative additions (TWh)
© OECD/IEA 2013
Global RE capacity additions led by windOnshore outlook more optimistic than in MRMR 2012Policy uncertainties make additions volatile in some areasOffshore wind outlook more pessimistic than MRMR 2012, with financing and integration challenges
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5
10
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25
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
OECD Americas OECD Asia Oceania OECD EuropeChina Rest of Non‐OECD
Total wind (onshore + offshore) annual capacity additions by region (GW)
© OECD/IEA 2013
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1
2
2012 2015 2018
PV Annual Capacity Additions (GW)
Strong growth seen in China, Africa, Middle East, and Latin America
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2012 2015 2018
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2012 2015 2018
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2012 2015 2018
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2012 2015 2018012345
2012 2015 2018
0246810
2012 2015 2018
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2012 2015 2018
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2012 2015 2018
Solar PV growing out of Europe
© OECD/IEA 2013
But other technologies lagging behind
Potential of offshore power remains high, but technical, financial and grid connection issues pose challengesStorage adds value to CSP, but deployment hampered by relatively high costs
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TWh
OECD Americas OECD Asia Oceania OECD Europe Africa Asia ChinaNon-OECD Europe Non-OECD Americas Middle East MTRMR 2012
Wind offshore Concentrating Solar Power
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2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
TWh
OECD Americas OECD Asia Oceania OECD Europe Africa Asia ChinaNon-OECD Europe Non-OECD Americas Middle East MTRMR 2012
© OECD/IEA 2013
RE largest contributor to total electricity increase in OECD
Renewables expected to grow almost like fossil fuels in America, and more than total demand in Europe
- 100
100
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Total OECD OECD Americas OECD Asia Oceania OECD Europe
TWh
Renewables Nuclear Fossil fuels Others
Changes in power generation by source and region, OECD, 2012-18
© OECD/IEA 2013
0%
2%
4%
6%
8%
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12%
14%
16%
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2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
TWh US renewable power generation 2006-18
Hydro Bioenergy Wind onshore Solar PVSolar CSP Geothermal Ocean Wind offshore% share of RE % non-hydro
Renewables to reach 15% of US power generationDrivers
state‐level mandatesvery good renewable resourcesample grid capacity for integrationattractiveness of small‐scale solar PV; financial innovation
Challengesuncertainty over federal tax creditssome competition with gasscale‐up of less‐mature technologies
© OECD/IEA 2013
China accounts for 40% of global growthDrivers
strong gov’t backing with FYPs and expected quota systemeased rules for grid connection and announced small‐scale incentivesample low‐cost financerobust manufacturing
Challengeslack of market pricing framework and priority dispatch in general Integration of variable renewablessupply chain bottlenecks, lack of deployment for offshore wind, CSP
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2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
TWhChina renewable power generation 2006‐18
Hydro Bioenergy Wind onshore Solar PV Solar CSPGeothermal Ocean Wind offshore % share of RE % non-hydro
© OECD/IEA 2013
Renewables and natural gasGas generation to crowd out renewables? Or vice‐versa?
Renewables and gas can both grow strongly…
Globally: coal‐to‐gas switching can lead to large reductions in CO2 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
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Policy uncertainty is the number one risk
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1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018Annual additions Projected additions
Expiration of federal PTC
Assumed expiration of PTC at end-2013
Uncertainty over PTC renewal at end-2012
US onshore wind annual additions (GW)
0
0.5
1
1.5
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2.5
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3.5
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Annual additions Projected additions
Assumed moratorium on new projects under Special Regime from Jan 2012 onwards
Deep financial incentive cuts and cap for solar PV
Spain solar PV + CSP annual additions (GW)
Abrupt, retroactive policy changes
Stop & go policies
© OECD/IEA 2013
Main messages to policy makers
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
© OECD/IEA 2013
For further insights and analysis…
The Medium‐Term Renewable Energy Market Report 2013 can be purchased online at:
www.iea.org
Thank you for your attention!
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