More Related Content Similar to Medium-Term Renewable Energy Market Report 2012 (20) More from International Energy Agency (20) Medium-Term Renewable Energy Market Report 20122. Objective and scope
With the increasing role of a portfolio of maturing
renewable technologies in the power mix…
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 2011-17
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
with some analysis on solar thermal heating
Completes slate of IEA MT forecasts: oil, gas, coal
Methodology consistent with other MT reports
© OECD/IEA 2012
4. 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
5. 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
6. Growth is led by non-OECD countries
Non-OECD accounts for two-thirds of the overall growth
China, Brazil, India lead; others grow significantly as well
OECD growth still largely driven by Europe but Americas
and Asia-Oceania make significant contributions
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
OECD Americas OECD Asia-Oceania OECD Europe
China Brazil India Rest of non-OECD
© OECD/IEA 2012
7. 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
2011
2005
2017
2011
2017
2011
2005
2017
2011
2005
2011
2005
2017
2011
2005
2005
2017
2011
2005
2017
2017
Onshore Offshore Bioenergy Solar PV CSP Geothermal Ocean
wind wind
© OECD/IEA 2012
8. Annual growth patterns for non-hydro
technologies vary significantly
China becomes deployment leader
OECD Europe deployment growth slows
OECD Americas growth reflects US policy uncertainties
GW
Annual capacity additions , non-hydro technologies
40
35
30
25
20
15
10
5
0
2010 2011 2012 2013 2014 2015 2016 2017
OECD AO OECD AM OECD EUR China Rest of non-OECD
© OECD/IEA 2012
9. 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
10. Investment in renewable electricity
Annual investment topped USD 250 billion in 2011
Most recent quarterly data suggest some slowing
Economic and credit risks weigh on medium-term picture
European bank project finance and utility finance more strained
Other sources/structures of finance play increasing role
Development banks
New institutional and non-traditional corporate investors
Smaller scale financial innovation for small distributed capacity
Ultimately, cost and availability of financing to depend
most on prevailing policy and technology environments
© OECD/IEA 2012
11. Renewable technologies compete better in a
wider range of circumstances
Renewable generation in general still more expensive
than bulk power but…
Hydropower and geothermal mostly competitive
Onshore wind competes well in good resource areas
Solar PV approaches peak gen. costs in places with summer peak
Residential PV can be cheaper than average retail power prices
USD/MWh Levelised costs of power generation
Utility scale Small scale
500
400
300
200
100
0
© OECD/IEA 2012
13. US renewable generation to grow steadily
Average renewable growth of 2.4% annually over 2011-17
Non-hydropower growth at stronger rate, + 8.4% annually
Onshore wind, solar PV and bioenergy grow strongest
CSP and geothermal growth are large in global terms
% of total power gen: 9% (2005), 13% (2011), 14-15% (2017)
TWh
United States renewable generation and forecast
700
600
500
400
300
200
100
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Hydropower Wind onshore Bioenergy Solar PV Geothermal CSP Wind offshore
© OECD/IEA 2012
14. State mandates drive the US picture
Main US deployment drivers: state RPSs, federal financial
incentive levels, ample grid capacity, innovative financing
Source: DSIRE (March 2012). © OECD/IEA 2012
15. But other challenges remain in the US
Main US deployment challenges:
Duration of federal incentives
Wind production tax credit (PTC) expires at end-2012; but investment
tax credit for solar goes through 2016
Competition with natural gas
Cost and availability of tax equity finance
GW US wind capacity growth
10
Forecast based
on expiration of
PTC at end-2012
8
6
Expiration of federal PTC
4
2
0
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
© OECD/IEA 2012
16. China accounts for 40% of global growth
Drivers: Challenges:
Growing energy needs Pricing framework
Diversification Priority dispatch
Government targets Grid upgrades
Ample low-cost finance Prohibitive licensing for
Robust manufacturing small-scale systems
TWh
1 800
Challenges: generation
China forecast renewable TWh
8 000
China power demand vs GDP growth Y-o-Y
Chg
18%
1 500
Pricing framework 16%
14%
1 200 Priority dispatch 6 000
12%
900 Grid upgrades 4 000
10%
8%
600 Prohibitive licensing for 6%
300
small-scale systems 2 000
4%
2%
0
0 0%
2011 2012 2013 2014 2015 2016 2017 2005 2008 2011 2014 2017
Hydropower Wind onshore Bioenergy Solar PV Wind offshore CSP Demand Demand, Y-o-Y (RHS) GDP, Y-o-Y (RHS)
Source: © OECD/IEA 2012
17. India sees strong hydropower, wind and solar growth
Drivers: Challenges:
Supportive policy High distribution losses and
environment: Five-Year Plan regulated prices
targets, diverse financial Grid strengthening and
incentives expansion needed
Low-cost financing from dev. Complex administrative
banks and private sector requirements for projects
Rural electrification needs –
distributed generation
TWh
India forecast renewable generation TWh India domestic electricity supply and
250
1 000
distribution losses 100%
200 800 80%
150 600 60%
100 400 40%
50 200 20%
0 0 0%
2011 2012 2013 2014 2015 2016 2017 2000 2002 2004 2006 2008 2010
Hydropower Wind onshore Bioenergy Solar PV CSP Ocean Domestic electricity supply Percentage losses (RHS)
© OECD/IEA 2012
18. Brazil’s hydropower and wind grow strongly
Drivers: Challenges:
Government sponsored power Adequate margins for wind
auctions projects (?)
Cost reductions – wind recently Environmental licensing
outbid natural gas Economic attractiveness of
Pipeline of hydropower projects solar PV (?)
Low-cost financing from dev.
banks and private sector
TWh
Brazil forecast renewable generation Brazil average auction price for new wind
600 160
500 140
120
400
100
300
80
200
60
100 40
BRL per megawatt-hour
20
0 USD per megawatt-hour
2011 2012 2013 2014 2015 2016 2017
0
Hydropower Wind onshore Bioenergy Solar PV 2009 2010 2010 2011 2011 2011
Reserve A-3 Reserve A-3 Reserve A-5
© OECD/IEA 2012