Renewables 2017: Detailed market analysis and overview of renewable electricity, biofuels, and heat

1. Renewables 2017
London – 04 October 2017

2. © IEA 2017
Context
Ø Policy support & technology progress continue to drive robust growth in
renewables
Ø Solar PV broke new records in 2016, led by China
Ø Solar PV grew faster than any other form of generating capacity
Ø Competitive auctions are seeing record-low prices for wind & solar
Ø Prospects for renewables underpinned by need to address core energy
challenges
Ø Air pollution still a major problem
Ø Universal access to modern energy remains a distant goal
Ø Current climate pledges fall short of meeting mitigation goals

3. © IEA 2017
2016 – Renewables hitting new records driven by solar PV
Renewables breaking an all-time record accounting for two thirds of global net capacity additions;
For the first time solar PV becoming the global leader in net capacity growth
Power capacity additions by fuel 2016
0 50 100 150 200
Renewables
Gas
Wind
Solar PV
Coal
Additions (GW)
Retirements

4. © IEA 2017
Price discovery through competitive auctions effectively reduces costs along the entire value chain;
Auctions with long-term contracts will drive almost half of new capacity growth over 2017-22
Announced wind and solar PV average auction prices by commissioning date
Competition driving costs down
0
20
40
60
80
100
120
140
160
180
2012 2013 2014 2015 2016 2017 2018 2019 2020
USD/MWh
Onshore wind
average auction
price
Solar PV average
auction price

5. © IEA 2017
Renewables growth more and more dependent on wind and solar
Solar PV enters a new era, becoming the undisputed leader in renewable power capacity growth;
PV also accounts for 60% of the upside potential in the accelerated case
Renewable electricity capacity growth by technology
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
0
200
400
600
800
1 000
1 200
1999-2004 2005-10 2011-16 2017-22
Capacity growth (GW)
Additional -
accelerated case
Others
Hydropower
Solar PV
Wind
% from wind and
solar PV (right axis)

6. © IEA 2017
China continues to lead growth while India overtakes the EU
The forecast is 12% more optimistic vs. last year mainly due to solar PV revisions in China and India;
Growth could be 27% higher with enhanced policies addressing regulatory uncertainties and grid integration
Renewable capacity growth by country/region
0
50
100
150
200
250
300
350
400
450
500
China United States EU India Japan Brazil Africa&ME
Capacity growth (GW)
2011-16 2017-22 main case Additional accelerated case

7. © IEA 2017
Solar PV enabling electrification in India, Bangladesh and sub-Saharan Africa
With government policies and innovative business models, off-grid PV capacity triples in Africa and developing Asia.
Small home systems bring initial electricity access to almost 70 million by 2022
Cumulative growth of off-grid solar PV applications in developing Asia and sub-Saharan Africa
0
10
20
30
40
50
60
70
80
0
500
1 000
1 500
2 000
2 500
2017 2018 2019 2020 2021 2022
millionsMW
Additional SHSs
Additional industrial
Additional mini-grids
Initial electricity access
from SHS (right axis)

8. © IEA 2017
Renewables closing the gap with coal
Renewable generation to expand by over a third with its share increasing from 24% in 2016 to 30% in 2022, rapidly
closing the gap with coal
Electricity generation by fuel
0
2 000
4 000
6 000
8 000
10 000
12 000
2002 2006 2010 2014 2018 2022
Generation (TWh)
Coal
Natural gas
Renewables

9. © IEA 2017
Wind and solar transforming power sector - system integration becomes key
More flexible power systems, adapted market design and policies will have to play a key role
in integrating larger shares of wind and solar in a secure and cost-effective way
VRE share in annual electricity generation 2016-22
0% 10% 20% 30% 40% 50% 60% 70% 80%
Japan
Brazil
India
China
United States
Australia
Italy
United Kingdom
Germany
Spain
Ireland
Denmark
% of total generation
PV share in 2016
Wind share in 2016
Additional PV share
in 2022
Additional wind share
in 2022

10. © IEA 2017
Surging EVs to complement biofuels in renewable transport
Share of renewables in road transport increases from 4% in 2016 to almost 5% in 2022, with biofuels representing 80% of the growth led by
Asia & Brazil; EV electricity consumption doubles by 2022, with renewables providing 30% of demand
Biofuels
2/3 wheelers
Electric cars and
buses
2016 2022
4%
7%
Biofuels and electric vehicles contribution to renewable energy consumption in road transport

11. © IEA 2017
Progress in renewable heat depends on strong policies
Renewables share in heat consumption rises from 9% in 2016 to 11% in 2022. China leads absolute growth with new targets; EU remains the
largest renewable heat consumer while total heat demand outpaces renewables growth in India
Share of renewables in heat consumption by selected countries
0%
5%
10%
15%
20%
25%
2010 2012 2014 2016 2018 2020 2022
% of renewables
European Union
USA
India
China

12. © IEA 2017
Concluding remarks
Ø Renewables rise by 1,000 GW to 2022, equal to half of current total coal capacity
Ø Renewables generation exceeds 8,000 TWh by 2022, equal to total electricity consumption
of China, India & Germany combined
Ø Solar PV enters a new era leading the growth in renewables, driven by a rapid expansion in
deployment & manufacturing capacity in China
Ø Despite rapid growth in EVs, decarbonisation of transport is a long way off
Ø Only 30% of electricity used by EVs is sourced from renewables
Ø Advanced biofuels require specific incentives to bolster deployment
Ø Policymakers have to turn their focus to system integration & expanding the use of
renewables for heating & cooling