Cédric PHILIBERT, analyst in Energy and Climate Change, IEA, provided an overview of the renewable energies development and of the associated challenges and opportunities for the power grids.

1. Renewables: challenges and
opportunities for the power grid
Cédric PHILIBERT
Renewable Energy Division
International Energy Agency
Atoms for the Future, Paris, 22 October 2013
© OECD/IEA 2013

2. Positive mid-term outlook for renewable
electricity
Global renewable electricity production, by technology
TWh
IEA 2 ° C
Scenario 30%
8 000
7 000
25%
6 000
20%
5 000
4 000
15%
3 000
10%
2 000
5%
1 000
0
0%
2006
2008
Hydropower
Of f shore wind
Geothermal
Gas-fired
generation 2016
2010
2012
2014
Bioenergy
Solar PV
Ocean
Nuclear
generation 2016
2016
2018
2020
Onshore wind
CSP
% Total generation
Source: Medium-Term Renewables Market Report 2013
Renewable electricity projected to scale up by 40% from 2012 to 2018
Broadly on track with 2020 IEA 2°C scenario targets
© OECD/IEA 2013

3. The whole RE power mix accelerating its growth
Recent cumulative additions (TWh)
Forecast cumulative additions (TWh)
Hydro remains the largest increasing single renewable technology
But for the first time additional generation from all non-hydro sources
exceeds that from hydro
© OECD/IEA 2013

4. But other technologies lagging behind
Wind offshore
TWh
90
Concentrated Solar Power
TWh
40
80
35
70
30
60
50
25
40
20
30
15
20
10
10
5
0
0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
OECD Americas
Africa
Non-OECD Europe
MTRMR 2012
OECD Asia Oceania
Asia
Non-OECD Americas
OECD Europe
China
Middle East
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
OECD Americas
Africa
Non-OECD Europe
MTRMR 2012
OECD Asia Oceania
Asia
Non-OECD Americas
OECD Europe
China
Middle East
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 2013

5. Improving competitiveness
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
Utility scale
Small scale
500
MRMR 2012
400
Global levelised
costs of power
generation ranges
(USD per MWh)
300
200
100
0
Note: costs reflect differences in resource, local conditions, and the choice of sub-technology.
© OECD/IEA 2013

6. Renewable power spreading out everywhere
Total Renewable Annual Capacity Additions, by region (GW)
Source: Medium-Term Renewables Market Report 2013
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 2013

7. Non-OECD accounts for two-thirds of growth
TWh
7 000
Global renewable electricity production, by region
6 000
5 000
4 000
3 000
2 000
1 000
0
2006 2007 2008 2009
OECD Am ericas
Africa
Non-OECD Europe
MRMR 2012
2010 2011 2012 2013 2014 2015 2016 2017 2018
OECD Asia Oceania
OECD Europe
Asia
China
Non-OECD Am ericas
Middle East
In 2018, non-OECD comprises 58% of total renewable generation, up
from 54% in 2012 and 51% in 2006
China leads with deployment of a broad portfolio of renewables
Other key markets: Brazil (wind, bioenergy), India (wind, solar, bioenergy), South
Africa and Morocco (wind, solar), Thailand (bioenergy), Middle East (solar)
© OECD/IEA 2013

8. RE largest contributor to total
electricity increase in OECD
Changes in power generation by source and region, OECD, 2012-18
TWh
1 100
Renewables
Nuclear
Fossil fuels
Others
900
700
500
300
100
- 100
Total OECD
OECD Americas
OECD Asia Oceania
OECD Europe
Renewables expected to grow almost like fossils in America,
and more than total demand in Europe
© OECD/IEA 2013

9. Over the longer term, the power
generation mix is set to change
Global electricity generation by source, 2010-2035
TWh 14 000
12 000
Coal
Renewables
10 000
8 000
Gas
6 000
4 000
Nuclear
2 000
Oil
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
Source: IEA World Energy Outlook 2012 New Policies Scenario
Renewables electricity generation overtakes natural gas by 2016 & almost coal by
2035; growth in coal generation in emerging economies outweighs a fall in the OECD
© OECD/IEA 2013

10. Global climate-friendly electricity
mix by 2050
Variables
32%
22%
Renewables
57%
71%
Renewables to provide 57 to 71% of World’s electricity by 2050
in 2 degree scenarios - VRE 22 to 32%
© OECD/IEA 2013

11. The IEA Technology Roadmaps:
Hydropower
IEA roadmaps look at
technologies required to limit
climate change at 2°C
HP roadmpa co-authored with
Brazil’s Ministry of Mines and
Energy
Reviewers from agencies,
academia, governments,
industry, NGOs
Support from CEPEL, ADEME,
Iberdrola
© OECD/IEA 2012
© OECD/IEA 2013

12. Vision for Hydropower IEA
Roadmap
TWh
Share on total electricity generation
19%
17%
16%
Asia Pacific
China
India
Asean
Other Asia Pacific
Middle East
Africa
Africa M. East
OECD Europe
Europe & Eurasia
Russia
Transition eco.
Central & South America
North America
Brazil
Other LAM+Mex
Canada
USA
Hydropower generation will double by 2050 and
reach 2 000 GW and 7 000 TWh, mostly from
large plants in emerging/developing economies
© OECD/IEA© OECD/IEA 2013
2012

13. Technical improvements
Strengthened environmental requirements may
reduce hydropower output and potential
Technical improvements allow to increase or
maintain performance and output, and reduce
environmental impacts
© OECD/IEA© OECD/IEA 2013
2012

14. IEA Wind Power Roadmap 2013
Update considers recent trends
and revised long-term targets:
By 2050, 15% to 18% of global
electricity, vs. 12% targeted in the
former roadmap
Technology and cost evolution
2050 “Vision” based on global
energy context and system
optimization
Barriers and policy
recommendations
© OECD/IEA 2013

15. Wind power deployment to 2050
in the Roadmap Vision
Wind power to provide 15% to 18% of global electricity
China, Europe and the USA together account for two thirds
© OECD/IEA 2013

16. Land-based and offshore
deployment and costs
By 2050, 25% of total global wind capacity to be located at sea,
up from 6% in 2020
Investment costs for wind power to decrease by 25% on land
and 45% off shore by 2050
© OECD/IEA 2013

17. Technology Evolution
Growth in size, height
and capacity
Greater capacity
factors
Easier access to sites
with lower-speed
winds
Easing grid
integration with
more regular output
© OECD/IEA 2013

18. Wind costs decreasing
Land-based LCOE
Land-based wind
getting cheaper
Offshore not yet
But significant cost
decrease expected
Evolution of LCOE to 2050
USD/MWh
2050
60
48
44
High
130
104
136
136
65
High
218
174
Land-based
turbines
96
Low
Offshore
2020
Low
Land-based
2013
105
© OECD/IEA 2013

19. Solar PV growing out of Europe
PV Annual Capacity Additions (GW)
20
15
10
5
0
2012
2015
2018
3
2
1
0
2012
5
2015
2018
2
4
3
1
2
1
0
2012
2015
2018
0
2012
2015
2018
Strong growth seen in China, Africa, Middle East, and Latin America
© OECD/IEA 2013

20. Medium Term RE Market Report 2013
PV generation to 2018 by regions
© OECD/IEA 2013

21. PV Module Prices
Technology improvements and economies of scale
drive sharp cost reduction
Overcapacity leads to price setting below costs
© OECD/IEA 2013

22. Rapid system cost cuts
Solar PV system costs in Italy by size, EUR/W
8
7
6
5
€/W
4
3
2
1
1-3 kW
3-20 kW
20-200 kW
PV system Price (€/W)
200 – 1000 kW
2012
2011
2010
2009
2008
2012
2011
2010
2009
2008
2012
2011
2010
2009
2008
2012
2011
2010
2009
2008
2012
2011
2010
2009
2008
0
> 1 MW
Median
Source: GSE, 2013. Note: includes VAT.
© OECD/IEA 2013

23. PV LCOE depends on
Solar Resource and Cost of Capital
Best ‘sustainable’price ground-mounted PV systems: USD 1.7/W
Murcia, Spain
South Germany
South France
Sicily, Italy
Costs soon to reach competitive levels when and
where all favourable circumstances are met
© OECD/IEA 2013

24. Various IEA scenarios for PV
Time
GW
TWh
2018
308
368
2020
Scenario
Medium Term RE Market Report 2013
(370-390)
210
298
602
846
IEA Technology Roadmap (2010)
NPS
2035
World Energy Outlook 2012
966
1 371
3 155
2050
Source
4 572
2 017
2 655
450
IEA Technology Roadmap (2010)
2DS
Energy Technology Perspectives 2012
3 289
>2060
4 822
hiRen
12 000
18 000
« Testing
limits »
Solar Energy Perspectives (2011)
© OECD/IEA 2013

25. Distributed PV reaching “grid parity”
in some markets
Economics of distributed PV for self-consumption improving rapidly
Difficult to quantify deployment – further monitoring needed
Residential solar PV LCOE vs. average retail power prices (variable tariff)
USD/MW
USD/MWh
450
400
350
300
250
200
150
100
50
Average residential electricity price (variable tarif f )
0
2010
Residential solar PV, LCOE
estimates:
2011
Germany
2012
Italy
2013
California
Examples correspond to Southern Germany, Southern California and Southern Italy. LCOEs use average residential system costs (include VAT and sales tax in California and Italy where they are
applicable) and do not include financial incentives; ranges represent differences in financing costs and full load hours. The variable component of residential electricity prices calculated from average
annual household electricity prices and estimation of fixed and variable components as reflected on a household electricity bill. In Germany and Italy, variable component is estimated at 91% while in
California variable tariffs account for 99% of the bill. 2012 electricity prices are taken as proxy for 2013 in Germany and Italy where data not yet available. 2013 prices in California based onOECD/IEA 2013
1Q2013.
©

26. Variability limits self-consumption
Daily self-consumption example – a household with 5-kW PV system in Germany
June - cloudy
June - sunny
June – partly
cloudy
March – partly
sunny
December –
cloudy
December – very
cloudy
In grey, electricity drawn from the grid. In blue, electricity injected into the grid. In green, selfconsumption. Numbers indicate the percentage of self-consumed electricity. Horizontal axes: hours.
Vertical axes: watts. Source: Génin, 2013.
Self-consumption higher for:
Some office and commerce buildings with high daily consumption,
and relatively small systems on multi-storey dwellings
Self-consumption potentially increased with:
Load management
Decentralised electricity storage (if/when affordable)
© OECD/IEA 2013

27. Paying for grid injected excess power
Payment
System
FIT/FIP
Where
Germany
Observations
•FIT below LCOE
•Reduces FIT costs
Net Metering Denmark, US
States,
Australia
(Italy since July)
•Netting period critical
•Can over-reward
generation
•Overall level often
capped
Market based California
or avoided
cost
•Likely to be more
sustainable in long-term
© OECD/IEA 2013

28. Electricity System Implications
Fixed Grid Cost
Recovery
Integration Costs
•Depend on match of PV
output and peak demand
•Who pays as commercial
power demand reduced?
More time-based
pricing and different
user profile-adjusted
tariffs
Foregone
Tax
Need for better
assessment
System
Concerns
RE
Surcharge
© OECD/IEA 2013

29. Solar thermal electricity (CSP plants)
Absorber
Tube
Curved
mirror
Absorber tube and
reconcentrator
Linear Concentration
C: 100
T: ~ 500 °C
Curved mirror
Pipe with
thermal fluid
Parabolic Trough
Receiver / Engine
Reflector
Linear Fresnel
Solar
Receiver
Point Concentration
C: 1000+
T: ~ 1000+ °C
Heliostats
Dish/Engine
Central Receiver
© OECD/IEA 2013

30. Why STE/CSP might survive the
competition of PV
Higher costs but built-in
thermal storage
When demand peaks after
sunset!
If PV (plus minimum load of
back-up, if any) already
saturates demand at noon
Only competing option (for now): pump-hydro storage
Saudi Arabia plans for 2032: PV 16 GW and 25 GW STE/CSP;
China’s plans for 2030
STE very flexible, helps accommodating more PV (when
replacing coal)
© OECD/IEA 2013

31. Various IEA scenarios for STE/CSP
Time
GW
TWh
2018
12.4
(14)
34
2020
147
414
72
278
Scenario
Medium Term RE Market Report 2013
IEA Technology Roadmap (2010)
NPS
2035
World Energy Outlook 2012
219
815
1 089
2050
Source
4 770
859
3 333
450
IEA Technology Roadmap (2010)
2DS
Energy Technology Perspectives 2012
1 108
>2060
4 125
hiRen
6 000
25 000
« Testing
limits »
Solar Energy Perspectives (2011)
© OECD/IEA 2013

32. Ocean power to have a small absolute
contribution to RE generation
Small to medium size demonstration projects are expected to come online
Two tidal barrages (France, Korea) represent the majority of generation
Forecast is more optimistic than in MTRMR 2012 mainly due to Korea’s plans
to deploy large scale tidal barrages
Ocean generation and projection by region
TWh
2.3
2.0
1.8
1.5
1.3
1.0
0.8
0.5
0.3
0.0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
OECD Americas
Africa
Non-OECD Europe
MTRMR 2012
OECD Asia Oceania
Asia
Non-OECD Americas
OECD Europe
China
Middle East
© OECD/IEA 2013

33. Geothermal advances but with slower
growth rates
Investment risks associated with drilling and exploration remains as a major
challenge to deployment
60% of growth to come from OECD countries and the rest from Southeast
Asia , Africa and Latin America
Geothermal generation and projection by region
TWh
100
90
80
70
60
50
40
30
20
10
0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
OECD Americas
Africa
Non-OECD Europe
MTRMR 2012
OECD Asia Oceania
Asia
Non-OECD Americas
OECD Europe
China
Middle East
© OECD/IEA 2013

34. Bioenergy scales up with increased use of
agricultural, municipal waste and co-firing
China is largest grower, with ambitious targets and increasing renewable
waste-to-energy plants
Other non-OECD countries – Brazil, India and Thailand – also expected to
add significant new generation
OECD growth dominated by Europe, driven by 2020 targets
Bioenergy generation and projection by region
TWh
600
500
400
300
200
100
0
2010
2011
2012
OECD Americas
Africa
Non-OECD Europe
MTRMR 2012
2013
2014
2015
OECD Asia Oceania
Asia
Non-OECD Americas
2016
2017
2018
OECD Europe
China
Middle East
© OECD/IEA 2013

35. Variable RE will need more Flexibility
Grid
infrastructure
Dispatchable
generation
Storage
Demand side
integration
Value of flexibility has to be reflected in the market
Need for a suite of different flexibility options
GIVAR III study to be published in January 2014
© OECD/IEA 2013

36. © OECD/IEA, 2011
PSP: 99% of current on-grid storage
Pumped-hydro plants the reference solution
140 GW in service, 50 GW in development
PSP developed from existing hydro plants
“off-stream” or “pumped-back” schemes
Small energy volumes but large power capacities
Daily/weekly storage does not require large areas
Source: Inage 2009.
© OECD/IEA 2012
© OECD/IEA 2013

37. Vision for PSP deployment by 2050
China
Japan
21%
24%
43%
18%
Hydro/total
energy
14%
6%
13%
12%
PSP/total
capacity
4%
4%
6%
11%
2%
GW
119
58
91
35
109
vRE/total
energy
High
Europe
vRE/total
energy
Low
USA
34%
37%
48%
33%
Hydro/total
energy
15%
6%
11%
13%
PSP/total
capacity
5%
8%
10%
12%
3%
179
139
188
39
164
GW
RoW
Total
412
700
© OECD/IEA 2013

38. The way forward: testing the limits
Under severe climate constraints…
What if other low-carbon energy options are
not easily available?
Where are the technical limits to solar energy?
Assuming efficiency improvements and further
electrification of buildings, industry and transport
Not always least cost, but affordable options
Footprint, variability and convenience issues
Three broad categories of situations:
Sunny and dry climates, where CSP dominates
Sunny and wet climates, with PV backed by hydro
Temperate climates, with wind power and PV
backed by hydro, pumped-hydro and H2-NG plants
© OECD/IEA 2010

39. cp1
Testing limits: key role of electricity
Electricity share keeps growing as efficient enduse technologies continue to penetrate markets
Source: Heide et al. 2011
Source: Heide et al. 2011
Solar energy dominated by power (STE and PV)
© OECD/IEA 2010
© OECD/IEA, 2011
Space heating needs reduced and satisfied with
ambient heat through heat pumps
Many options converging towards USD 100/MWh
Solar PV (and wind) electricity storage where STE is
not feasible: pumped-hydro plants

40. Diapositive 39
cp1
Paolo: add illustrations in these four slides
ieauser; 26/08/2011

41. Testing the limits: Electricity by 2060
------ 3000
© OECD/IEA 2010
© OECD/IEA, 2012

42. Testing limits:
key results
Solar energy
could provide a
third of final
energy after 2060
If energy efficiency is greatly improved
Footprint and variability solvable issues
Solar energy, wind power, hydro power and
biomass provide most of the world’s final
energy demand
Other renewables important in places
Some uses of fossil fuels still required, but CO2
emissions reduced to 3 Gt or less if CCS is available
© OECD/IEA 2010

43. A reminder
© OECD/IEA 2013