Download Medium-Term Renewable Energy Market Report 2015: Renewables

Medium-Term Renewable
Energy Market Report 2015:
Renewables poised to lead
world power market growth
Dr. Paolo Frankl
Renewable Energy Division
International Energy Agency
© OECD/IEA 2015
Brazilian launch, 15-16 December 2015
© OECD/IEA 2015
Renewables are becoming the largest
source of new power generation capacity
World net additions to power capacity
1 600
1 400
1 200
1 000
G
W
800
600
400
200
0
2008-2014
Fossil fuels
Nuclear
2014-20
Hydropower
Analysis from the IEA Medium-Term
Renewable Energy Market Report
2015 and the New Policies Scenario
of the World Energy Outlook 2015.
Non-hydro renewables
The share of renewables in net additions to power capacity continues to rise with non-hydro
sources reaching nearly half of the total
© OECD/IEA 2015
Strong momentum for renewable
generation growth
Renewable generation by technology, main case forecast and scenario analysis
12 000
Generation (TWh)
10 000
8 000
Historical
Share of renewables in total
generation
6 000
22%
4 000 18%
34%
Forecast
26%
Scenario
analysis 2DS
targets
(IEA ETP
2015)
2 000
0
20052006
200720082009
201020112012
201320142015
201620172018
20192020
Hydropower Bioenergy Onshore windOffshore windSolar PV Geothermal STE
2025
Ocean
Share of non-hydropower in renewable electricity generation is expected to increase
significantly, but an acceleration is needed to meet climate change objectives
© OECD/IEA 2015
Evidence of lower costs on the horizon
Recent announced long-term contract prices for new renewable power
Onshore wind
Germany
USD 67-100/MWh
Utility-scale solar PV
Germany
USD 96 /MWh
Canada
USD 66/MWh
Turkey
USD 73/MWh
United States
USD 47/MWh
China
USD 80–91/MWh
United States
USD 65-70/MWh
India
USD 88-116/MWh
Jordan
USD 61-77/MWh
Brazil
USD 81/MWh
Brazil
USD 49/MWh
Chile
USD 65-68/MWh
United Arab Emirates
USD 58/MWh
Uruguay
USD 90/MWh
South Africa
USD 51/MWh
South Africa
USD 65/MWh
Egypt
USD 41-50/MWh
Australia
USD 69/MWh
This map is without prejudice to the status or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area
A combination of price competition, long-term contracts, good resources and financial derisking measures is creating deployment opportunities in newer markets and at lower costs
© OECD/IEA 2015
How quickly can RE costs converge
towards best world benchmarks?
Typical utility-scale solar PV levelised costs of electricity generation (2010-2020)
Great differences in generation costs persist not only due to solar irradiation levels but also
due to different system prices and cost of financing
© OECD/IEA 2015
Slower hydropower deployment expected
but untapped potential remains
Note: Actual and potential hydro generation
data from the International Journal of
Hydropower and Dams Atlas
Slower hydropower additions expected by 2020 as permitting delays and droughts push back
projects, but high potential for growth over the longer term in Africa, Asia, and South America
© OECD/IEA 2015
Growth shifting to emerging markets and
developing countries
Shares of net additional renewable power capacity, 2014-20
Rest non
-OECD
13%
Brazil
5%
India
9%
EU
13%
USA
9%
Japan
5%
Rest OECD
8%
China
38%
As the OECD slows, non-OECD countries account for two-thirds of renewable growth, driven by
fast-growing power demand, diversification needs and local pollution concerns
© OECD/IEA 2015
China to be market leader in both
wind and solar PV by 2020
GW
250
Cumulative-connected
grid
wind capacity
Cumulative-connected
grid
solar capacity
250
200
200
150
150
100
100
50
50
0
2014
2020
2020 accelerated
Onshoe wind
0
Offshore wind
2014
2020
2020 accelerate
Solar PV
China’s cumulative wind capacity to more than double while solar PV to quadruple in
2020 but further growth is possible if higher targets are set
© OECD/IEA 2015
China - Grid and interconnections are
key
By 2020, more than 22 UHVDC lines will link over 200 GW wind power
turbines and 100 GW solar power plants to the Chinese load centers
© OECD/IEA 2014
© OECD/IEA 2015
11
Federal tax incentive uncertainty drives
bumpy US renewable growth
Annual additions (GW)
US annual net additions to renewable capacity
20
18
16
14
12
10
8
6
4
2
0
Impact of federal
tax incentive policy
uncertainty
Forecast
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Hydropower
Bioenergy
Onshore wind
Offshore wind
Solar PV
Geothermal
STE
Ocean
After China and Europe, the US is the third largest market for new renewable generation,
but federal and state-level policy uncertainties create volatile deployment pattern
© OECD/IEA 2015
Renewables are powering Latin America’s
economic growth
Latin America power demand growth versus new renewable generation
350
300
250
TWh
200
150
100
50
0
2002-08
Hydropower
2008-14
Other renewables
2014-20
Fossil fuels and nuclear
Excellent resources have underpinned hydropower’s strong role. Now, with policy momentum,
attractive economics and diversification needs, other renewable sources grow more rapidly
© OECD/IEA 2015
Renewable growth in Latin America
underpinned by hydro, wind and solar PV
Latin America cumulative renewable capacity growth (2014-20)
90
Cumulative additions (GW)
80
70
60
50
40
30
20
10
0
2014
2015
Hydropower
2016
2017
Onshore wind
2018
2019
Solar PV
2020
STE
Brazil accounts for most of Latin America’s accelerated case with a 6GW increase possible
with faster commissioning of hydro projects, more wind auctions and a clearer market
framework for distributed PV
© OECD/IEA 2015
Can renewables get back on track to meet
climate change goals?
World renewable power capacity growth, main versus accelerated case
180
180
160
160
Historical
Historical
AcForecast
celerated case
140
140
120
120
GW
W
G
100
100
80
80
60
60
40
40
20
20
00
2006
2006 2007
2007 2008
2008 2009
2009 2010
2010 2011
2011 2012
2012 2013
2013 2014
2014 2015
2015 2016
2016 2017
2017 2018
2018 2019
2019 2020
2020
United
EU-28OtherOther
U
nited StateStates
s
JapJapan
an
EU-28
OECD OECD
India India
China China
Brazil
Brazil
Other
Other non-O
ECD non-OECD
Main case
Policy enhancements can ensure continued renewables deployment growth and put
the power sector back on track to meet long-term climate change goals
© OECD/IEA 2015
Persistent challenges slow growth
in heat and transport
Historical and forecast share of renewables in electricity, heat and
transport sectors 2005-20
Share of renewables in sector
demand
30%
25%
Foreca
Renewable
electricity
20%
15%
Renewable
heat
10%
5%
0%
Biofuels in
road
transport
Growth of renewable electricity generation is increasing, while renewable heat and transport
are falling behind.
© OECD/IEA 2015
An acceleration of Biofuels growth is
required
Global biofuels production and medium-term forecast
Transport accounts for 20% of global energy related CO2 emissions, meaning a strong biofuels
industry, alongside improved fuel economy and EV roll-out, is central to decarbonisation
© OECD/IEA 2015
Early signs of commercialisation in the
advanced biofuels sector
Commissioned commercial scale advanced biofuel plants
Advanced biofuels – needed for long-term decarbonisation of the transport sector – are
starting to scale up, but development requires further policy support.
© OECD/IEA 2015
Challenging for cellulosic ethanol to
compete at current low oil prices
Cellulosic ethanol breakeven crude oil price for competitiveness with gasoline
1,40
Wholesale gasoline price (USD /
litre)
1,20
2014-15 cost estimates
1,00
Achievable with
industry
expansion?
0,80
0,60
0,40
0,20
0,00
150
140
130
120
110
100
90
80
70
60
50
Crude oil price (USD/barrel)
2014-15 cellulosic ethanol industry cost estimate (adj. for energy content)
40
Note: Equivalent wholesale gasoline prices are based on a USD 10/barrel margin on
crude oil price.
Current production cost estimates suggest breakeven with gasoline at USD 100-130/barrel
crude oil prices, but realising significant scope for cost reduction could change this picture
© OECD/IEA 2015
A decisive moment for the future of renewables
 Increasingly affordable renewables are set to dominate the growing





power systems of the world
The impact of the lower oil price environment on global deployment of
renewables is limited – particularly in the power sector
While variability of renewables is a challenge energy systems can learn to
adapt to, variability of policies poses a far greater risk
Accelerated growth of renewables to meet energy security, local pollution
and climate protection goals is feasible
With great resource potential in Latin America, affordable renewables are
seen contributing to energy diversification and sustainable development
COP21 Paris framework agreement could significantly boost renewables
deployment by:
 Fostering clear and predictable policies and providing strong signals to markets
 Improving financing conditions for low-C technologies
© OECD/IEA 2015
IEA work on renewables
 The MTRM 2015 can be purchased at: www.iea.org/bookshop/
 Renewables analysis a crucial part of IEA long-term scenario analysis: e.g. World Energy
Outlook, Energy Technology Perspectives, Tracking Clean Energy Progress
 IEA renewables website: http://www.iea.org/topics/renewables/
 Renewable Policies and Measures Database:
http://www.iea.org/topics/renewables/renewablesiea/policiesmeasuresdatabasepams/
© OECD/IEA 2015