The document discusses the IEA's Medium-term Renewable Energy Market Report for 2012. Some key points: 1) The report forecasts that global renewable power generation will rise 40% from 2011-2017, driven by policy support, falling technology costs, and carbon pricing in some regions. 2) By 2035, electricity from renewables is projected to triple and account for almost one-third of total electricity output globally. Solar power capacity is forecasted to increase by a factor of 26 by 2035. 3) Renewables are projected to become the world's second largest electricity source by 2015, approaching coal as the primary electricity source by 2035. Over 3000 GW of new renewable capacity will be

1. PV in IEA Medium‐term Market
Forecast and Long‐term Scenarios
Roberto VIGOTTI
Vice Chair RE Working Party
© OECD/IEA 2012

2. E’ uscito l’ultimo rapporto della WB
© OECD/IEA 2012

3. La brutta notizia
 Il rapporto che esamina i rischi legati ad un riscaldamento
climatico di 4 gradi entro la fine del secolo, ma stavolta
non sono gli scienziati dell'Ipcc o qualche associazione
ambientalista a lanciare l'allarme, ma il cuore del gotha
economico planetario: il Gruppo della Banca Mondiale.
 Il verdetto è senza appello: le attività umane sono
responsabili del riscaldamento del pianeta e questo
riscaldamento si sta già traducendo in cambiamenti
osservabili.
 Senza misure concrete di lotta contro il cambiamento
climatico, la comunità internazionale potrebbe subire le
conseguenze catastrofiche di un aumento di 4 gradi della
temperatura media entro la fine del secolo
© OECD/IEA 2012

4. La raccomandazione della Banca
 L'adozione di politiche di sviluppo sostenibile potrebbero in
effetti permetterci di limitare il riscaldamento planetario a
meno di 2 gradi,
 Un utilizzo più efficace e più intelligente dell'energia e delle
risorse naturali potrebbe permetterci di ridurre radicalmente
l'impatto dello sviluppo sul clima, senza per questo rallentare
gli sforzi della lotta contro la povertà o la crescita economica.
 Ogni Paese sceglierà metodi differenti per realizzare una
crescita più ecologica, ma in ognuno di essi esistono delle
occasioni di crescita verde da sfruttare.
 Conclude il rapporto: «La previsione di 4° C di riscaldamento
semplicemente non deve essere permesso che si verifichi,
questo “caldo” deve essere respinto. Solo azioni a scala
internazionali possono farsì che questo accada».
© OECD/IEA 2012

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7. © OECD/IEA 2012

8. Renewables take their place in the sun
 Re make up an increasing share of primary energy use in
all scenarios, thanks to government support, falling costs,
CO2 pricing in some regions and rising fossil fuel prices in
the longer term.
 By 2035, electricity from renewables triples, and will
account for almost one‐third of total electricity output.
Solar grows more rapidly – 26 times !!‐ than any other
renewable technology, and will provide 7,5% of all RE
based generation. Wind almost ¼.
 Renewables become the world’s second‐largest source
of power generation by 2015 (roughly half that of coal)
and, by 2035, they approach coal as the primary source
of global electricity
© OECD/IEA 2012

9. RE capacity additions per year
A total of 3000 GW of Re capacity –including replacements – is built 2012‐2035,
more than half of total gross capacity additions in the power sector
© OECD/IEA 2012

10. Cumulative investment in RE‐based
electricity generation in NPS
Cumulative investments of 6 trillion $ required by 2035, with annual investments
up to 300 billion $ in 2035. RE accounts 62% of total investement in power
generation © OECD/IEA 2012

11. IEA and its key publications on RE
© OECD/IEA 2012

12. The Medium Term RE Market Report
 The IEA is publishing its first medium‐term
report focused on renewable energy
 Bottom‐up, global renewable forecast of renewable
electricity capacity and generation over the next 5
years
 Detailed analysis of 12 OECD countries (Austria,
Denmark, France, Germany, Italy, Japan, Norway, Spain,
Sweden, Turkey, UK, US) and China, India, Brazil
(~80% of world renewable electricity)
 For 2012 edition, focus on 8 technologies in
power sector
 Completes slate of IEA MT forecasts: oil, gas,
coal
© OECD/IEA 2012

13. Key trends
 As a portfolio of renewable technologies matures, global
renewable power generation is forecast to rise 40%
 Supported by policy/market frameworks and economic
attractiveness in increasing range of countries and circumstances
 Technology cost developments, grid/system integration,
cost/availability of financing also weigh as key variables
 High level of economic/policy uncertainty in some countries
 This projected growth is an acceleration vs previous period
 Growth is 60% higher over 2011‐17 versus 2005‐11
 Renewable deployment is projected to spread out
geographically, with increased activity in emerging markets
 Deployment spurring economies of scale in some technologies ‐
virtuous cycle of improved competition and cost reductions
© OECD/IEA 2012

14. Non‐hydro technology deployment
spreads out
 Number of countries with cumulative capacity larger than 100MW
(can cover consumption of 100k households) increases significantly
 Growth areas include Asia, Africa, Latin America and the Middle East
Number of countries with installed
capacity above 100 MW
80
Non-OECD
OECD
60
40
20
0
2005
2011
2017
2005
2011
2017
2005
2011
2017
2005
2011
2017
2005
2011
2017
2005
2011
2017
2005
2011
2017
Onshore Offshore Bioenergy Solar PV CSP Geothermal Ocean
wind wind
© OECD/IEA 2012

15. Generation additions over 2011‐17 differ
across regions and technology portfolios
OECD Americas (+179 TWh)
OECD Asia‐Oceania (+77 TWh)
Wind onshore
Wind onshore
Bioenergy
Bioenergy
Solar PV
Solar PV
Other
technologies
Other
technologies
OECD Europe (+365 TWh)
Non‐OECD (+1 220 TWh)
Hydropower
Hydropower
Wind onshore
Wind onshore
Bioenergy
Bioenergy
Solar PV
Solar PV
Other Other
technologies technologies
© OECD/IEA 2012

16. Medium‐term solar PV outlook
 Global capacity to top 230 GW in 2017 (baseline)
 Markets quickly changing due to changing policy environment
(China, Japan, Germany, Italy, etc.) and falling costs
 Market shifting to good resource areas that don’t need subsidies
GW
Global solar PV capacity forecast
250
200
150
100
50
0
2011 2012 2013 2014 2015 2016 2017
Germany China US Japan Italy RoW
© OECD/IEA 2012

17. Outlook uncertainty significant
 Germany and Italy’s projections already challenged
 EPIA’s range in 2016: 208GW – 343GW
GW
Global solar PV capacity forecasts comparison
350
300
250
200
150
100
50
0
2011 2016 IEA 2016 IEA 2016 EPIA 2016 EPIA
baseline enhanced Moderate policy-driven
Germany China US Japan Italy RoW
© OECD/IEA 2012

18. Penetration shares
2017 2010/11
GW enhanced case power system Benchmark %
China 48.1 1050 5%
Germany 47.7 157 30%
USA 33.0 1040 3%
Japan 28.4 287 10%
Italy 26.8 105 25%
 European countries like Germany and Italy could be
reaching high PV penetration shares by 2017
 Emerging economies but also the US represent much
larger potential markets
© OECD/IEA 2012

19. RE Support Shows Impact on
Household Prices
ct/kWh EUR
30
25
20
15
10
5
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Generation, transport, distribution VAT Concession fee EEG surcharge CHP law Electricity tax
 In 2011 PV
 Generated around 20% of EEG supported energy
 Accounted for approx 45% of all EEG payments
© OECD/IEA 2012

20. PV Generation Impacting Spot Markets
80,0
70,0 Conventional Wind PV
60,0
50,0
GW
40,0
30,0
20,0
10,0
0,0
0 1 2 3 4 5 6 7 8 9 1011121314151617181920212223
Power generation in Germany, 14 May 2012 hr
2007 2008 2009 2010 2011
Phelix Base 37.99 66.76 38.85 44.49 51.12
[EUR/MWh]
Phelix Peak 56.16 88.07 51.15 55.02 58.95
[EUR/MWh]
Spread [%] 149 134 132 124 115
Source: Top, EEX Transparency Platform; Bottom EEX cited as in http://www.agora‐
energiewende.de/fileadmin/downloads/Agora_Energiewende_Impulse_Kapazitaetsmarkte.pdf © OECD/IEA 2012

21. Medium‐term solar PV manufacturing outlook
 Amid overcapacity, solar PV industry undergoing major
restructuring
 Selling at zero margins or loss to keep market share
 Chinese companies taking larger market share
 Upheaval likely to persist for several years
 Companies locating manufacturing closer to emerging
markets
 Sunnier countries with high demand growth more attractive (e.g.
Asia and Middle East)
 Capital less costly, more accessible in Asia
 Chinese companies increasingly produce for large,
domestic market
© OECD/IEA 2012

22. Conclusions
 Massive improvements in recent years
 IEA forecasts PV world capacity to increase
x 3‐4 times over next 5 years
 However, system and market integration issues
emerging in specific countries  market
reforms needed
 Moving to new countries and competitive
market segments is key
 Huge long‐term potential
© OECD/IEA 2012

23. For further insights and analysis…
 The Medium‐Term
Renewable Energy
Market Report 2012
online at:
www.iea.org
 Thank you for your
attention!
roberto.vigotti@gmail.com
© OECD/IEA 2012

24. Le conseguenze
 Innalzamento del livello del mare l'agricoltura, le risorse
idriche, la salute umana, la biodiversità saranno
verosimilmente gravemente colpiti. Queste ripercussioni
potrebbero produrre vasti spostamenti di popolazioni, ridurre la
sicurezza e perturbare i sistemi economici ed il commercio.
 Ondate di calore
 Acidificazione degli oceani
 Calo delle rese agricole. in tutto il mondo, con gravi
rischi per la sicurezza alimentare futura
 I rischi per i servizi eco‐sistemi agli esseri umani, rischi
gravi per le incidenze negative sulla disponibilità di acqua
© OECD/IEA 2012

25. Share RE by category and scenario
© OECD/IEA 2012

26. Growth in renewable power is forecast
to accelerate
 Hydropower remains the main renewable power source (+3.1% p.a.)
 Non‐hydro renewable sources grow at double‐digit annual
percentage rates (+14.3% p.a.)
TWh
Global renewable electricity production and forecast
7 000
6 000
5 000
4 000
3 000
2 000
1 000
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Hydropower Wind onshore Bioenergy Solar PV
Geothermal Wind offshore CSP Ocean
© OECD/IEA 2012

27. Enhanced case
 Enhanced case is a country‐specific exercise for 15
countries covered in detail in the report (not the rest of
the world)
 It assumes market specific barriers to RE are overcome
350
2017 Baseline 350
2017 Enhanced
300 300
RoW RoW
250 250
Italy Italy
200 Japan 200 Japan
150 US 150 US
China 100 Germany
100
Germany China
50 50
0 0
GW TWh GW TWh
© OECD/IEA 2012

28. Renewables will play a key role
in a sustainable future mix in 2050
60.000
TWh
24%
50.000
57%
71%
40.000 Other RES
Wind
Solar
Bioenergy and wastes
30.000
Hydro
19% Nuclear
Oil
20.000
Natural gas
Coal
10.000
-
2009 2050 2050 2050
6DS 2DS 2DS hi-REN
Source: IEA Energy Technology Perspectives 2012
© OECD/IEA 2012